Globalization and the Time-Space Reorganization : Capital Mobility in Agriculture and Food in the Americas [1 ed.] 9780857243188, 9780857243171

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GLOBALIZATION AND THE TIME–SPACE REORGANIZATION: CAPITAL MOBILITY IN AGRICULTURE AND FOOD IN THE AMERICAS

RESEARCH IN RURAL SOCIOLOGY AND DEVELOPMENT Series Editor: Terry Marsden Recent Volumes: Volume 1:

Focus on Agriculture

Volume 2:

Focus on Communities

Volume 3:

Third World Contexts

Volume 4:

Rural Labor Markets

Volume 5:

Household Strategies

Volume 6:

Sustaining Agriculture & Rural Community

Volume 7:

Focus on Migration

Volume 8:

Dairy Industry Restructuring

Volume 9:

Walking Towards Justice: Democratization in Rural Life

Volume 10:

Nature, Raw Materials and Political Economy

Volume 11:

New Directions in the Sociology of Global Development

Volume 12:

Between the Local and the Global

Volume 13:

Gender Regimes, Citizen Participation and Rural Restructuring

Volume 14:

Beyond the Rural–Urban Divide: Cross-Continental Perspectives on the Differentiated Countryside and Its Regulation

Volume 15:

Welfare Reform in Rural Places: Comparative Perspectives

Volume 16:

From Community to Consumption: New and Classical Themes in Rural Sociological Research

RESEARCH IN RURAL SOCIOLOGY AND DEVELOPMENT VOLUME 17

GLOBALIZATION AND THE TIME–SPACE REORGANIZATION: CAPITAL MOBILITY IN AGRICULTURE AND FOOD IN THE AMERICAS EDITED BY

ALESSANDRO BONANNO Sam Houston State University, Texas, USA

JOSEFA SALETE BARBOSA CAVALCANTI Federal University of Pernambuco, Pernambuco, Brazil

United Kingdom – North America – Japan India – Malaysia – China

Emerald Group Publishing Limited Howard House, Wagon Lane, Bingley BD16 1WA, UK First edition 2011 Copyright r 2011 Emerald Group Publishing Limited Reprints and permission service Contact: [email protected] No part of this book may be reproduced, stored in a retrieval system, transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without either the prior written permission of the publisher or a licence permitting restricted copying issued in the UK by The Copyright Licensing Agency and in the USA by The Copyright Clearance Center. No responsibility is accepted for the accuracy of information contained in the text, illustrations or advertisements. The opinions expressed in these chapters are not necessarily those of the Editor or the publisher. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library ISBN: 978-0-85724-317-1 ISSN: 1057-1922 (Series)

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CONTENTS LIST OF CONTRIBUTORS

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INTRODUCTION Alessandro Bonanno and Josefa Salete Barbosa Cavalcanti

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PART I: SPACE AND TIME REORGANIZATION IN SOUTH AMERICA CHAPTER 1 WORKERS IN GLOBAL COMMODITY CHAINS: THE ORGANIZATION OF LABOR IN EXPORT GRAPE PRODUCTION Ben Selwyn

CHAPTER 2 CAPITAL MOBILITY AND NEW WORKSPACES IN FRUIT-PRODUCING REGIONS OF BRAZIL AND ARGENTINA Josefa Salete Barbosa Cavalcanti, Mo´nica Isabel Bendini, Dalva Maria da Mota and Norma Graciela Steimbreger

CHAPTER 3 LABOR MOBILITY IN THE FIELD OF AGRICULTURE AND FOOD GLOBALIZATION Gustavo Henrique de Souza Dias and Josefa Salete Barbosa Cavalcanti

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PART II: SPACE AND TIME REORGANIZATION IN NORTH AMERICA CHAPTER 4 THE CHANGING CHARACTER OF SMALL TOWN ONTARIO: TRANSNATIONAL CAPITAL/LABOUR FLOWS IN A NOT-SOGLOBALIZED-WORLD Joa˜o-Paulo Bola Sousa

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CHAPTER 5 FREE TRADE OF COFFEE, EXODUS OF COFFEE WORKERS: THE CASE OF THE SOUTHERN MEXICAN BORDER REGION OF THE STATE OF CHIAPAS Marie-Christine Renard

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CHAPTER 6 GLOBAL PRODUCTIVE CAPITAL MOBILITY: THE CASE OF CHILEAN FARMED ATLANTIC SALMON Douglas H. Constance and M. Kirk Jentoft

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CHAPTER 7 TRADE AND POVERTY: CHANGES IN FARMING AND COMMUNITY IN NAFTA’S FIRST DECADE Pablo Alvarez, Jason Barton, Kathy Baylis and Marybel Soto-Gomez CHAPTER 8 CONCLUSIONS: THE CONTRADICTIONS OF THE RECONFIGURATION OF TIME AND SPACE Alessandro Bonanno and Josefa Salete Barbosa Cavalcanti

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LIST OF CONTRIBUTORS Pablo Alvarez is currently continuing his graduate work at the Autonomous University of Barcelona, Spain. Jason Barton is a Ph.D. candidate in the Department Resource and Environmental Economics, Land and Food Systems of the University of British Columbia, Canada. Kathy Baylis is an assistant professor in the Department of Agricultural and Consumer Economics, University of Illinois, IL, USA. Mo´nica Isabel Bendini is a professor of sociology at the Universidade Nacional do Comahue, Researcher of Conicet, Argentina. Alessandro Bonanno is a Texas State University System Regents professor of sociology and department chair at Sam Houston State University, USA. Josefa Salete Barbosa Cavalcanti is a researcher of CNPq- the Brazilian National Research Council and an associate professor at the Department of Social Sciences, Universidade Federal de Pernambuco, Brazil. Douglas H. Constance is a professor of sociology at Sam Houston State University, USA. Dalva Maria da Mota is a researcher of CNPq – the Brazilian National Research Council – and at CPATU, EMBRAPA Amazoˆnia Oriental, Bele´m, Brazil. Gustavo Henrique de Souza Dias is a doctoral candidate at the Universita¨t Humboldt zu Berlin, Germany. M. Kirk Jentoft is a Ph.D. candidate in the Department of Sociology at Colorado State University, USA. Marie-Christine Renard is a professor in the Department of Rural Sociology Universidad Auto´noma Chapingo, Mexico. Ben Selwyn is a lecturer in International Relations and Development Studies at the University of Sussex, UK. vii

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Marybel Soto-Gomez is a research assistant in the Department of Resource and Environmental Economics and Land and Food Systems, University of British Columbia, Canada. Joa˜o-Paulo Bola Sousa is a Ph.D. candidate in the School of Environmental Design and Rural Development at the University of Guelph, Canada. Norma Graciela Steimbreger is a professor of sociology at the Universidad Nacional del Comahue, Argentina.

INTRODUCTION Alessandro Bonanno and Josefa Salete Barbosa Cavalcanti Globalization has been often associated with the notion of hypermobility of capital. Because of this posture, a great deal of attention has been paid to the concept of capital mobility and its consequences. In this edited volume we explore the new capital mobility under globalization and some of its salient consequences affecting the social relations in agriculture and food in the Americas. In particular, we probe the manner in which capital mobility alters the organization of the temporal and spatial dimensions that characterize the reproduction of capital. This is an important aspect of globalization because it reproduces the tension between the constant attempt of agents of capitalism to expand theirs scope of action and accelerate the time of the reproduction of capital and the fixed nature of the institutions and measures that are employed to regulate capitalism. Both the acceleration of mobility and the regulation of capital are key requirements for the expansion and reproduction of capitalism. The analysis of this contradictory aspect of globalization is carried out through the presentation of seven cases that, while global in scope and social implications, are located in North and South America.

Globalization and the Time–Space Reorganization: Capital Mobility in Agriculture and Food in the Americans Research in Rural Sociology and Development, Volume 17, 1–31 Copyright r 2011 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1057-1922/doi:10.1108/S1057-1922(2011)0000017003

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SPEEDS OF CAPITAL MOBILITY At the outset, though, and before brief summaries of each of these cases are presented, it is important to underscore two key points that guide the organization of the entire volume. First, capital mobility is a complex phenomenon that assumes various forms as different types of capitals move at different velocities. Second, capital mobility is a necessary and irreplaceable component of capitalism. As for the first aspect, we will consider three types of capital: financial capital, productive capital, and labor. Obviously, these three forms of capital are endowed with different features that affect their behaviors and their ability to move through time and space. While all these three forms of capital share the common requirement that they need to be utilized in increasingly accelerated manners if capital accumulation had to expand, they also display tendencies that favor financial and productive capital and subordinate labor. If effect, the subordination of labor to financial and productive capital is one of the primary characteristics of globalization and one item that allowed the rapid expansion of capital accumulation over the last two decades. In the contemporary global society, financial capital moves at the fastest pace among the three forms of capital as digital technology associated with neoliberal deregulation makes it instantly mobile. Financial transactions are now possible in ‘‘real time’’ as stock market, intrafirm, and interfirm operations take place voluminously every day. Accordingly, companies and individual investors are able to mobilize capital and deploy it instantaneously worldwide with virtually no restrictions. The virtues of this new high capital mobility have been underscored by many. Thomas Friedman (2000), for instance, contends that the ability of capital to move electronically around the globe constitutes not only an economic benefit, but also a vehicle through which substantive democracy can be achieved. In his view, a ‘‘herd’’ of electronic investors operates in a market in which information is virtually available to all. This situation overcomes the primary limitation of previous forms of the free market – that is, imperfect information – and allows all investors to compete fairly. Simultaneously and also due to the free flow of information, the majority of investors will select the most appropriate forms of conduct creating the conditions for a democratic management of the economy and society. This rosy view of financial capital mobility has been contrasted by events that stress the difficulty to control capital that moves at a very high velocity. While control and regulation of financial transactions are attempted by national and international organizations, it is possible for financial

Introduction

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transactions to occur so rapidly and so frequently as to become virtually untraceable. As cases of overt violations of financial rules have demonstrated,1 transnational corporations can now bypass controls with enhanced ease and generate deceiving public images. In recent years, a number of financial scandals have shaken the public trust and painted a different and much more sober picture of the global financial sector. As financial capital moves across the globe at high speed, its organization and control take centralized forms. As fewer larger corporations dominate the overall flow of capital, they require increasingly specialized coordination centers that have emerged in a relatively small number of global cities. Due to the sophistication of global financial operations and the required knowhow, financial capital must be supported by clusters of professionals and infrastructures that cannot be easily duplicated. Accordingly, global cities have assumed a fundamental role in globalization as they provide these forms of expertise and infrastructure and through centralization permit the high global mobility of capital (Sassen, 2007). Productive capital moves at a relatively slower and qualitatively different speed. Globalization has been characterized by the decentralization of production processes that once were concentrated in one or a few locations and executed by one or a few productive units. As indicated by the now copious literature on productive capital mobility (see, for instance, Dicken, 1998; Harvey, 1989; Sassen, 2007), this decentralization takes a number of forms including the ‘‘put-out’’ and ‘‘just in time’’ systems – whereby components of the final product are generated by independent units under contract agreements for varying time periods – and the relocation of existing plants to localities that offer more convenient conditions and factors of production. By searching for appropriate sites and resources around the globe, a phenomenon known as global sourcing, corporations have taken advantage of existing socioeconomic conditions (cheap and/or docile labor and abundant and/or inexpensive natural resources) and political climates (tax abatements and/or fiscal and economic incentives provided by local administrations to attract investments) to relocate plants and restructuring production. To be sure, some of the above-mentioned concessions have been obtained by simply announcing an imminent plant move. Threatened by job losses and declining revenues, local administrations have been willing to grant additional support to corporations even in the absence of an actual move. Simultaneously, these incentives have not necessarily deterred some companies from taking the support and still moving to more convenient locations (see Barlett & Steele, 1998; Bonanno & Constance, 2006).

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While plant relocation is an often employed global corporate strategy, the ability to move productive structures and use more profitable local resources encounters some limits. Three specific barriers to the mobility of productive capital have emerged with regularity. First, there exist local social and structural conditions that discourage the relocation of plants or create unexpected obstacles to their functioning in the new sites. Instances of this situation include culturally based behaviors that prevent the mobilization of labor and other resources, lack of development of necessary infrastructures, and resistance from other segments of the local economy and society. Second, corporations are forced to alter their designs as communities respond to plant relocation schemes by mobilizing political opposition. These actions take a number of forms such as street demonstrations, sit-ins, union-led initiatives, as well as deliberations from elected bodies. They are based on a number of factors that range from concerns over the deterioration of the community’s quality of life and economic well-being to the fear of the large flows of immigrants (Bonanno & Constance, 2006). Third, shifting outlet markets establish conditions that favor some regions while disfavoring others. Corporations are quick to respond to these changes and to redesign their plans relocating their production facilities in places where the advantages of these new market situations can be maximized. Labor moves at a much slower pace. Even in a climate of trade liberalization and dominant neoliberalism, it remains one of the most regulated commodities in the global era.2 This is not a coincidence, but a factor that not only allows for the rapid acceleration of capital accumulation but also permits the more efficient control of labor and minimization of its resistance to dominant groups and arrangements (Harvey, 2006). In the past, labor was most effectively controlled through market mechanisms and the implementation of agreements between the social parts. Historically, fluctuations in the labor market have empowered workers in situations in which high labor demand was met by a relatively limited supply. Simultaneously, the creation of labor surpluses – that is, the formation of labor reserve armies – constituted one of the most effective tools to depress wages and contains workers’ socioeconomic claims. Under Fordism and for most of the second portion of the 20th century, however, labor was also controlled through the creation of ‘‘social pacts’’ (Harvey, 1989). The socalled ‘‘labor management accord’’ that defined the High Fordist years (1945–1975) allowed the pacification of labor–management relations, the steady increase of productivity, but also employment stability. The corporate design to maintain stable production cycles was accompanied

Introduction

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by union strength and state mediation (Aglietta, 1979; Antonio & Bonanno, 2006). Ultimately, this situation translated into pacified labor relations that engendered growing wages, higher profits, and control of labor through enhanced consumption and promises of further social integration and equality (Habermas, 1975; Marcuse, 1964). Under globalization, the creation of transnational production networks created a sustained demand for labor. Contrary to the past, however, now labor is weakened and placed under tighter forms of control. Frequently, global sourcing and plant relocations place production facilities in regions with higher labor supplies. These regions are selected not only for the availability of abundant labor, but also for the relative docility of this workforce and local socio-political conditions that enhance its control. Additionally, the use of this weak labor limits the power of stronger labor pools as the two are placed in direct competition regardless of their actual physical distance. The slower velocity of labor as compared to financial and productive capital, therefore, is employed to weaken labor’s economic and political strength. As demand weakens in labor-rich regions, workers are forced to migrate. Because labor migration is highly controlled, these migratory flows have generally taken the forms of either short-term immigration programs – that allow workers to move for limited periods and specific tasks – or illegal immigration (Harvey, 2006). In both cases, labor-market mechanisms become largely irrelevant3 and labor control is shifted to the sphere of legality, whereby the ability (or lack of it) to produce papers that document labor’s legitimate presence in the area constitutes the most important factor in labor control and discipline. As these conditions persist, workers experience difficulties in claiming higher wages, better working conditions, and even resist increasing episodes of overviolence against them. The high vulnerability of immigrant labor is also reinforced by ideological mechanisms that stigmatize immigration. In North America – as well as other affluent world regions – dominant discourses identify immigrants as violators of established laws and a potential threat to national security. Accordingly, they are labeled as undesirable members of society. These discourses provide political support for conservative groups as local middle and lower classes view strong anti-immigration stands as positive responses to their vulnerability to economic restructuring. Simultaneously, the dominant class – and in particular its entrepreneurial component – is unwilling to halt and/or reduce migration flows as it would create negative consequences to capital accumulation. While this stigmatizing view of immigration contradicts the convenience of the availability of a cheap and

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highly controllable workforce, both are employed to control immigrant labor and reinforce its exploitation.4

CAPITAL MOBILITY IS A CONSTANT COMPONENT OF THE EXPANSION OF CAPITALISM Studies on the relationship between the economy and society, in general, and on the evolution of agriculture and food and rural areas, in particular, have pointed out that one of the primary characteristics of globalization is the ability of capital to move about the globe with much enhanced ease than in previous eras of capitalism (Dicken, 1998; Harvey, 1989, 2005; McMichael, 2002). In particular, contributors to the debate on the characteristics of globalization often describe capital mobility in terms of the compression of space and time (Harvey, 1989) and the consequent hypermobility of capital (Bonanno & Constance, 2006). The mobility of capital under globalization is defined as hypermobility because of the accelerated production and consumption of commodities and the concomitant acceleration of the reduction – and even elimination – of barriers to this mobility. Accordingly, capital moves about the world faster and with fewer problems than in the past. This definition implies two interrelated aspects of capital mobility. The first refers to space while the second refers to time.5

SPACE The first implication refers to the fact that capitalism cannot exist without the ability of capital to move and colonize new spaces. Therefore, capital mobility is a constant and essential component of capitalism and it is not a new process. In his classical analysis of the functioning of capitalism, Marx argues that: The need of constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe. It must nest everywhere, settle everywhere, establish connection everywhere. (Marx and Engels [1848] 1998, p. 39)

Additionally, he contends that: The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draw all, even the most barbarian, nations into civilization. (Marx and Engels [1848] 1998, p. 39)

Introduction

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According to Marx, then, the process of the spatial expansion of capitalism is not only necessary but also depends on the continuous ability of capital to penetrate space and bring it in under the capitalist mode of production. The ‘‘need [of capital] of constantly expanding market for its products’’ also indicates that markets are not simply created through the addition of new space, but they depend on the reconfiguration of already colonized spaces. New markets are sought and new industries created replacing existing ones. Marx contends: All old established national industries have been destroyed or are daily being destroyed. They are dislodged by new industriesy . (Marx & Engels [1848] 1998, p. 39)

Through capital mobility, space, therefore, is transformed and retransformed to fit the continuously evolving requirements of capitalism.6 In this context, Marx’s understanding of space assumes a historical dimension that is both social and dynamic. It is social because it is linked to the social character of capitalist production. It is shaped by the evolution of the relations of production that change in accordance to the interests and power of the ruling class and the opposition of subordinate classes. Physical space, therefore, is transformed into social space as it becomes used and understood in ways, and for purposes, that do not necessarily coincide with those of the past.7 This historically bound reorganization of space is also dynamic as the clash between dominant and subordinate classes mandates its continuous reshaping. In this case, the uses and understandings of space found in feudalism differ from those of capitalism and, within capitalism, different eras feature different spatial arrangements. In this respect, Marx is clear about the implication of the dynamic dimension of space under capitalism. He states: The bourgeoisie keeps more and more doing away with the scattered state of the population, of the means of production, and of property. It has agglomerated population, centralized means of production, and has concentrated property in a few hands. The necessary consequence of this was political centralization. Independent, or but loosely connected provinces, with separate interests, laws, governments and system of taxation, become lumped together into one nation, with one government, one code of law, one national class interest, one frontier and one custom tariff. (Marx & Engels [1848] 1998, p. 40)

Marx underscores the historical importance of the creation of a ‘‘national space’’ that was linked to the establishment, organization, and control of national markets. This organized national space became a fundamental step for the expansion of capitalism, so it was the ability of capital to move about this space efficiently and with increased velocity. This efficiency and velocity

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defined capitalism’s growth. The tasks of establishing, organizing, and controlling national markets were provided by the nation state that employed its powers to assist the ruling class in maintaining its domination. Simultaneously, while the bourgeoisies had to expand its scope of action, it also had to organize and control the forces of production contained within it. Most importantly, it had to organize and control the use of labor. The homogenization and standardization of production processes and their organization under unified national spaces (that is, national laws, interests, policies, and practices) and through the actions of the state were viewed by Marx as key objectives of the bourgeoisie. For Marx, the dynamic nature of capitalism does not simply allow its development to be limited to the organized and homogenized spatial dimension contained within nation states. He contends that capital mobility transcends the nation and with that the regulatory and controlling dimensions embedded in the nation state. In this regards he states: The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country y [old industries] are dislodged by new industries, whose introduction becomes a life and death question for all civilized nations, by industries that no longer work up indigenous material, but raw material drawn from the remotest zones; industries whose production are consumed not only at home, but in every quarter of the globe. In place of the old wants, satisfied by the production of the country, we find new wants, requiring for their satisfaction the products of distant lands and climates. In place of the old local and national seclusion and selfsufficiency, we have intercourses in every direction, universal interdependence of nations. And as in material, so also in intellectual production. National one-sidedness and narrowmindedness become more and more impossible, and from the numerous national and local literatures, there arises a world literature. (Marx & Engels [1848] 1998, p. 39)

For Marx, the ultimate dimension of capital expansion and mobility is global as capital cannot be contained by any pre-ordain spatial dimension. It must create and recreate new spaces were it to continue the search for profit. This need of the bourgeoisies to reshape space to fit the requirements of capital accumulation is as continuous as is the requirement to organize the use of factors of production and, above all, to reproduce and control labor. This represents a key contradiction of capitalism that is implicit in Marx’s observations. The accumulation of capital requires economic and political concentrations that are manifested through the organization and regulation of the use of the forces of production. However, capital mobility tends to transcend any given organized space – such as the national space and the nation state – making it contradictory to the requirements of organization and regulation. Simultaneously, the regulation of the use of the

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forces of production requires the existence of forms of social interdependence – such as that between capitalists and workers – that are codified in the spatial and temporal conditions associated with the nation. As these conditions are eroded and capital mobility transcends the nation state, established forms of interdependence are destroyed, displaying the contradictory and unsustainable dimension of capitalism. The points about the socially constructed and dynamic dimensions of space underscored by Marx have been acknowledged by classical sociologists.8 Max Weber ([1921] 1968, p. 313), for instance, analyzes the growth of the modern capitalist factory in terms of ‘‘rationalization’’ of the use of space. Weber argues that the capitalist factory first coexisted with other and more fragmented and decentralized forms of production such as craft work – a centralized location of production without advanced machinery – and the domestic system – decentralized production often taking place at the home of the workers – but eventually emerged as the more efficient use of production space. The centralization of production in the factory and the emergence of rational production procedures provided the necessary impetus for the development of capitalism in the West. Weber also stresses the fundamental importance of the organization of space under the nation-state system ([1921] 1968, pp. 313–316). The modern state organized the national space in formal rational terms and was instrumental in the development of bureaucracies and authority structures that further fostered the process of capitalist growth. Paralleling Marx’s argument, Weber points out the necessary interdependence between the development of the capitalist enterprise and capitalism itself with the ‘‘professional administration, specialized officialdom’’ and rational law ‘made by jurists and rationally interpreted and applied’’ established under the nation-state system ([1921] 1968, p. 313). Like Marx, he also stresses the monetarization of social relations that the creation of national markets and nation states entailed. In this much more rationalized system, space, as well as time, are reorganized to maximize efficiency and calculability and are planned to avoid unpredictable outcomes of capital expansion. In his view, the social space is transformed to become instrumental to the orderly expansion of capital accumulation.

TIME The second implication of the definition of capital mobility refers to the velocity with which capital is reproduced. This is the velocity with which

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capital is transformed from its money form into commodities that are then transformed again into money (Marx & Engels [1867] 1977, pp. 247–257). The latter represents a greater quantity of capital that has been augmented by the profit obtained during this cycle (Marx & Engels [1867] 1977, p. 251).9 This velocity is associated with the completion of the ‘‘turnover time of capital’’ that includes both production and consumption of commodities and the generation of profit. The faster the time at which capital completes this cycle, the greater is the frequency of profit generation. In this second aspect of capital mobility, therefore, emphasis is placed on time. It is the speed through which commodities are produced and sold that defines the possibility of profit generation. The greater the acceleration of this time is, the greater the accumulation of capital will be, all things being equal. In volume two of Capital in the section entitled ‘‘production time,’’ Marx distinguishes between ‘‘working time’’ and ‘‘production time’’ (Marx & Engels [1885] 1992, pp. 316–325). Working time is defined as ‘‘time during which capital is confined to the production sphere.’’ This is the time in which labor transform factors of production into commodities. Production time, conversely, refers to the ‘‘entire time in which capital exists in the production process’’ (Marx & Engels [1885] 1992, p. 316) and includes time in which capital is idle due to natural limits. The time necessary to complete a given production process – ‘‘the turnover period’’ – is not fixed. But ‘‘y the turnover period can be often shortened to a greater or less extent by the artificial shortening of the production time’’ (Marx & Engels [1885] 1992, p. 317). Additionally, the turnover period doesn’t simply consist of production time and working time, it also involves the process of selling the products, that is, the process of transforming the products into commodities and ‘‘realizing’’ them through their further transformation intro money, or circulation time. ‘‘y the turnover time of capital is the sum of its production and its circulation or rotation time’’ (Marx & Engels [1885] 1992, p. 326). Additionally, the time needed for the process of circulation to be completed is not fixed. It can be accelerated. Paralleling the statement about production time, Marx writes: ‘‘According to the relative extent of this interval [i.e., the selling time], the circulation time in general and hence the turn-over period, is lengthened or shortened’’ (Marx & Engels [1885] 1992, p. 326). It follows from the above discussion that, for Marx, time, like space, is a historical product that is also social and dynamic. Time is socially constructed as it changes with the evolution of the forces of production and the relations of production. Advancements in technology, use of labor, transportation, and social arrangements resulted in the reorganization of the time necessary for capital turnover. Time is dynamic as this reorganization

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depends on the actions of the ruling class as well as on the ability of subordinate classes to oppose it. Like in the case of space, time acceleration is a consequence of the clash between the bourgeoisie and the working class. The historical nature of the organization of time is also stressed by Weber as he points out that the rationalization of the use of time was one of the most fundamental aspects of the development of capitalism (Weber [1921] 1968). He contends that the most distinctive element of the capitalist enterprise was the efficient organization of the production process that was achieved through the use of formal rationality. In this context, the capitalist enterprise distinguished itself from other enterprises by the constant search for the most rapid and cost-efficient manners to achieve its production goals. Modern book-keeping, Weber continues, allowed enterprises to measure the costs of acceleration of production and, consequently, to apply the most efficient production strategies. Ultimately, the general acceptance of modern book-keeping and the consequent rationalization of production processes defined the emergence of capitalist societies. For Weber, the monetarization of labor further allowed for rationalized forms of production that placed efficiency, calculability, and predictability as primary features of capitalism. Simultaneously, it allowed for the emergence of enhanced forms of control of labor.

TRANSFORMATION OF SOCIAL RELATIONS Capital mobility is a fundamental aspect of the expansion of capitalism as it is central for the reproduction of capital. This opening of new opportunities for capital to reproduce itself is accomplished through the constant ‘‘compression of time and space.’’ It is the ability of capital to accelerate its turnover time and move about a constantly reconfigured space that creates the basic conditions for the expansion of capitalism. In this theoretical construct, time and space stand to each other in a relational form.10 This means that the organization of time and space is not understood in isolation from the forces that shape the evolution of capitalism, but it is viewed as the outcome of the evolution of capitalism that contains it. Accordingly, each stage of the expansion of capitalism contains a historically bound time/space relation. Because of this relational nature of time and space, the mobility of capital and the concomitant compression of time and space signify a reorganization of social relations. The point is that the compression of time and space affects the organization of society. As time and space are constantly

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reorganized, so is society. Marx stresses that capital mobility constantly transforms social relations by stating: The bourgeoisie cannot exist without constantly revolutionizing the instruments of production, and thereby the relations of production and with them the whole relations of societyy . All fixed, fast-frozen relations, with their train of ancient and venerable prejudice and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profanedy . ([1848] 1998, p. 38)

To be sure, while this reorganization of society is continuous, it is by no means homogenous as the compression of time and space does not follow a constant pace. However, it is a constant dimension of capitalism and a process that cannot be altered under capitalism.11 Furthermore, the transformation of society signifies the transformation of the social institutions that regulate the functioning of capitalism. The emergence of the nation state represented the spatially based creation of institutions that were ‘‘lumped together’’ to form a relatively coherent system that not only allowed the development of capitalism, but also its regulation and control and use of the forces of production. As capitalism expands and colonizes new spaces – or recolonizes established ones – these institutional forms of regulation and control are transformed or changed. Following the above discussion, it is possible to analyze the space/time relation through the recent evolution of capitalism. In particular, the reading of the evolution of capitalism in terms of the time/space relation assumes particular importance as globalization is often defined in terms of the compression of time and space and hypermobility of capital. Moreover, it is also defined in terms of comparison with the temporal and spatial arrangements typical of Fordism, the historical period that preceded globalization (Harvey, 1989).

FORDISM AND THE NATION-STATE-MEDIATED TIME/SPACE RELATION In spatial and temporal terms, the local community was the central piece of social existence in the premodern era. At the beginning of the process that Giddens (1990) refers to as ‘‘distanciation,’’ space and time were unified in the community. That is, the lives and social relations of the members of the ‘‘community’’ were largely – if not exclusively – shaped by actors and events that were part of the community itself. Capitalism altered this situation

Introduction

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through the creation of markets and the concomitant homogenization of labor and production processes. Labor was transformed from heterogeneous and local (artisans and peasants who worked at their own pace and employed their own ways to produce goods) to homogenous and national so that it could be employed in factories. In this context, time had to be standardized allowing the acceleration of the operations necessary for the production and consumption of commodities (time compression) and their distribution and consumption over a greater space (space compression). The result of the compression of time and space12 and the homogenization of labor and labor practices was the creation of social relations that occupy different spatial and temporal dimensions than in the premodern era. Social relations took place in a relatively accelerated form and unfolded in a greater space. The society that emerged from the ‘‘decline’’ of the community was the national society or the society of the nation state (Arrighi, 1998; Giddens, 1990). As discussed above, the scope of capital mobility was never exclusively confined to national markets. Colonialism first and imperialism later were expressions of the global scope of capital mobility. However, the end of the colonial era after World War I only partially altered the world hegemony of the old colonial powers. In this context, many of the same hegemonic nation states continued their domination through economic and political control of former colonies and areas of influence. The most significant addition to this old group of worlddominant nation states was that of the United States. A much more significant change occurred after World War II with the Cold War and the beginning of High Fordism (Antonio & Bonanno, 2006). High Fordism was characterized by ‘‘regulated capitalism’’ or the systematic intervention of the nation state in the organization of capitalism and in the buffering of its unwanted consequences (Aglietta, 1979; Harvey, 1989). As indicated in the many analyses on this phenomenon, Fordism primarily meant an attempt to control market forces and to direct them toward socially desirable goals. The Fordist society was a society in which socioeconomic development was based on planning guided by the objective of capital accumulation and, simultaneously, the attempt to justify capitalism growth to subordinate groups that did not benefit from it (social legitimation). It was believed that through these measures social stability and the conditions for continuous socioeconomic growth would be maintained. The spatial temporal dimension of the reproduction of social relations shifted from the context of the relatively less regulated laissez faire capitalism of the turn of the century to the more regulated Fordist capitalism.13

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Internationally, the Fordist space was shaped by the Cold War-based split between East and West and the division between developed and developing countries. As the East was controlled by the Soviet Union and its version of communism, the West was US dominated. The Pax America that qualified this area’s first three postwar decades entailed the control and intervention of the American nation state in the organization of capitalism and in the development of measures to address its crises. Despite existing contradictions, the United States remained the leading world society both in economy and political terms and the model to be emulated by other countries. To a significant extent, economic and cultural ‘‘distances’’ from the United States defined underdevelopment as the concepts of ‘‘modern advanced society’’ and ‘‘modern democracy’’ were often defined in terms of the conditions existing in the United States. While stronger forms of socially oriented state intervention developed in Europe and other parts of the world and critiques of the American model emerged (Frank, 1979; Marcuse, 1964; Mills, 1959), American hegemony was hardly challenged under Fordism (Marcuse, 1964). US hegemony defined the context for the development of Fordist international institutions. Institutions such as the World Bank and the International Monetary Fund (IMF) were created and largely operated as appendices of the United States. Their planned interventions in international economic and social matters favored US interests but hardly achieved their declared developmental objectives (Goldman, 2005). In effect more often than not, these institutions’ interventions translated into the further worsening of the socioeconomic conditions of less developed regions and the strengthening of US control over local resources, dominant groups, and politics. However, these institutions’ ability to invest large quantity of funds in these regions produced some needed infrastructures and change while served as a regulator of labor and commodity availability and mobility (Aboites, Bonanno, Constance, Erlandson, & Martinez, 2007). Under Fordism, the nation state assumed central importance. The economy featured the growth of multinational corporations that retained strong allegiance to their home nation states as they operated globally. In return the nation state provided them with economic and political assistance, both domestically and internationally. As the say ‘‘what is good for GM is good for America’’ defined the mood of the time, economic international politics was often inspired by corporate interests. Yet, the nation state was forever attentive to domestic social matters and operated to redistribute wealth downward to the benefit of lower classes. While class differences continued to exist, social inequality did not worsen as the

Introduction

15

economic distance among classes was kept relatively constant (Harvey, 2005; Antonio & Bonanno, 2000). Because of this strong interventionist role played by the nation state, the Fordist space was organized around nations that were the subjects of processes of socioeconomic growth but also underdevelopment. Even alternative theories of development (Frank, 1979; Cardoso & Faletto, 1976; Wallerstein, 1974) viewed the spatial organization of capitalism in terms of a system of nation states in which the developed nations prospered at the expense of less advanced ones. Under Fordism, the time necessary to reproduce social relations was also increasingly framed by the intervention of the nation state. Commodity production and consumption and the overall capital circulation became strongly affected by state planning and intervention. The state operated to introduce key measures that often resulted in the pacification of management–labor relations, enhancement of research and development, greater production, productivity and trade, and protection of local industries from the perils of open competitions (Aglietta, 1979). In specific instances, the state directly acted in the economy by creating state-sponsored companies and/or entering in joint partnerships with private capital. This direct form of state intervention in the economy characterized the development of a number of countries particularly in Western Europe, Latin America, and Asia. The state also intervened to enhance consumption through the expansion of the welfare system and the implementation of policies that improved the economic conditions and spending power of the masses (Harvey, 1989). This intervention contributed to the growth of consumerism that is considered one of the most effective forms of social control of the era (Marcuse, 1964). Simultaneously, these improved economic conditions allowed the working class and other subordinate groups to experience a level of quality of life that was not available in the past. Agricultural commodities are arguably among the most typical examples of the Fordist intervention of the nation state. Nation states around the world intervened to regulate the production and prices of commodities with an array of justifications and measures. In the United States, the production and sale of agricultural commodities were regulated mostly through price support programs that artificially increased the prices paid to producers while allowing sales at lower prices. Additional measures included set-aside and quota programs that controlled the quantity of commodities produced. State intervention in the diffusion of agronomical, chemical, and mechanical innovations also affected the production of commodities and their circulation (Constance, Gilles, & Heffernan, 1990). This process was justified by the objective of guaranteeing the economic well-being of

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producers while making available adequate and affordable food for the growing urban population. Simultaneously, the notions of national food self-sufficiency and food security were often invoked as reasons for state intervention. In the European Union, similar measures were also practiced with particular attention paid to the control of outmigration from rural regions (Ferna´ndez & Ferna´ndez, 1990). While agricultural programs resembled those implemented in the United States, their use was justified on different grounds including the protection of local culture and localities, and the safeguard of the environment. Because of the strong socially oriented character of state intervention, labor was a commodity whose reproduction was significantly shaped by the state actions. The need to enhance productivity, discipline, and social control but also concerns about equality, opportunities, and social justice qualified the period. They also produced practices and understandings of socially desirable forms of labor reproduction and use. Accordingly, the creation of an available labor force was conditioned by the existence of acceptable levels of education (which was now mandatory in virtually all advanced societies and also in many developing countries), knowledge of the social and political mechanisms through which employment could be secured, understanding of the conditions and negotiations through which employment could be maintained, etc. Similarly, the use of labor assumed ‘‘times’’ that were regulated through various forms of state intervention such as limits on the working day; legislation defining acceptable procedures on the job; and union contracts establishing wages, job stability, and benefits, etc. To be sure, this was not simply an acceleration of the time necessary for the reproduction of labor. It was a reordering of time and space based on the introduction of levels of regulation of social relations that were unprecedented in the history of capitalism. Under Fordism, the nation state developed as a mediating agent between social groups and as an entity that intervened to control the evolution of capitalism and its unwanted consequences. Accordingly, capital mobility was affected by this mediating role of the nation state, the hegemonic control of the United States, and Fordist international institutions.

THE GLOBAL ERA The Fordist system entered its final crisis in the late 1960s and early 1970s. A number of factors contributed to this crisis, however, stagnating rates of capital accumulation on the one hand, and mounting costs of socially

Introduction

17

oriented state intervention and regulation on the other, are arguably two of the most important of these factors (Antonio & Bonanno, 2000; Harvey, 2005; Robinson, 2004). Additionally, Fordism lost legitimacy as it encountered opposition from all sides of the social spectrum and political arena. The progressive Left challenged Fordism arrangements on the grounds that it hardly delivered the promises of social integration and emancipation of subordinate groups and greater substantive democracy. Left-leaning social philosopher Ju¨rgen Habermas (1975, 2002) commented that Fordist state intervention and better socioeconomic conditions raised expectations about social equality and greater participation in decisionmaking processes that clashed with the ‘‘centralized control’’ of the Fordist state and capitalism. Analyzing the conditions that brought down Fordism and allowed for the development of globalization, Habermas contended that the ability of the state to sustain its expanded intervention in the economy and society were incompatible with the continued decline of the rate of profit and the private appropriation of surplus value. Conservatives challenged the system on both economic and cultural grounds. Economically, while the staginflation of the era was too punishing for capital, established political economic instruments employed to combat it (Keynesian policies) and proposed alternative strategies (austerity programs) proved ineffective and often counterproductive (Antonio & Bonanno, 2007; Harvey, 2006). Culturally, Fordism was accused of destroying key values – such as work, saving, prudence, rationality, and responsibility – that were central in the development of modern advanced capitalist societies (Bell [1976] 1996). A widely read, controversial, and influential work of this period, Daniel Bell’s Cultural Contradictions of Capitalism ([1976] 1996) held that bourgeois culture’s workaday values and habits were being ravaged by the hedonistic popular culture that had emerged in the postwar Fordist era. He argued that the late nineteenth and early twentieth centuries’ avant-garde fashioned an ‘‘aesthetic’’ modernismcontradicting Protestant ‘‘asceticism.’’ He contended that the avant-garde aestheticism, revived by the 1960’s counterculture revolt against bourgeois culture and then commercialized by the mass media and entertainment industry, universalized artistic alienation and shock, exhausted modernism’s creative impulses, and neutralized the values that were central in regulating the American working class in the early days of Fordism. By the late 1980s, the fall of the Berlin Wall and the final crisis of the Soviet regime along with the wide adoption of neoliberal economic policies worldwide signaled the beginning of the era of globalization. As indicated by the now large literature on the origins and development of globalization

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(see, e.g., Antonio & Bonanno, 2006; Dicken, 1998; Harvey, 2005; Robinson, 2004), it can be defined as a project – and the consequences of its implementation – to revive capital accumulation through the elimination of key aspects of Fordism. Referred as ‘‘rigidities,’’ these features of Fordism consisted of those measures that effectively regulated capitalism and minimized its unwanted consequences. Accordingly, institutions and policies that advantaged labor were among the primary foci of restructuring. Labor unions were defeated and their size and power significantly reduced worldwide. Working class gains were largely erased while much of the socially oriented state programs that benefited subordinated groups in general were rolled back or simply eliminated. In short, globalization implied both the crisis of organizations of the historical Left and of groups that supported it, but also the restoration of the power of the ruling class (Harvey, 1989, 2005). Production and consumption were radically altered under globalization. Production was decentralized and accelerated through the creation of global commodity networks that transcended national borders and made the identification of corporations with home countries increasingly difficult. This process was facilitated by the almost worldwide adoption of neoliberal postures that made national borders porous and allowed the acceleration of production and financial capital mobility. As indicated above, they also triggered large flows of labor migration that, however, remained much more controlled than other forms of capital (Sassen, 2007). More importantly, production networks reconfigured the space of production as they linked distant localities and labor pools while placing them in direct competition with each other. Global sourcing became the primary strategy to take full advantage of the newly enhanced capital mobility. Companies sought the most convenient factors of production in spaces and with times that made previously established borders often irrelevant. Global production was decomposed into subunits and subproduction processes, carried out by globally dispersed firms with highly divergent forms of labor, managerial, and financial organizations that may even follow traditional and local business practices and customs. Transnational corporations acquired the ability to select strategies that fit their interests with an unprecedented freedom. They were increasingly capable of bypassing nation-state regulations and requirements often established to benefit labor, protect the environment, and guarantee product and production safety. This decentralization was accompanied by concentration of capital as control of production became increasingly limited to a relatively small number of large corporations. Simultaneously, global centers emerged, such as global cities

Introduction

19

(Sassen, 2007). These are centers that provide corporations with the capability of directing and coordinating production and finance networks. Their spatial dimension also transcends Fordist (i.e., nation-state based) spaces as global cities’ functioning is determined by processes and decisions that are hardly coupled with national dynamics (Harvey, 2006; Sassen, 2007). Consumption has also been changed through the creation of networks that transcended spatial and temporal frameworks that characterized the Fordist past. Through the use of new technology and techniques (i.e., computer and electronic commerce) along with new structures (i.e., supermalls and supercenters), consumption is now not only much greater than in the recent past, but has assumed ‘‘qualities’’ that were not part of the Fordist past. Accordingly, while it is possible to argue that consumerism and its consequences have been enhanced, it is also possible to maintain that new, and perhaps emancipatory, forms of consumption have been developed (i.e., reflexive consumption, environment-friendly consumption, and socially responsible consumption). The development of these three dimensions of consumption is largely the result of the crisis of Fordist institutions. The centralized and rigidly controlled form of mass consumption of High Fordism has been replaced by personalized and flexible consumption. Among others, Lash and Urry (1994) argue that through the availability of new technology, individuals are able to choose paths of consumption with greater freedom than in the past. This freedom consists in their ability to make decisions without the assistance of institutions, which was fundamental in the past. For instance, the internet allows individuals to purchase vacations without having to resort to ‘‘packages’’ sold by travel agencies. These two Fordist mass consumption institutions – packages and travel agencies – can be bypassed under globalization. Simultaneously, relaxed state regulations have enhanced the power of corporations and consequently their profits. Fredric Jameson (1994) makes this point by arguing that the enhanced ability of individuals to make consumption decisions is actually colonized by corporations. In his view, consumers’ freedom is nothing more than a part of the corporate logic of creating new markets and increasing profit. At the cultural level, there has been the emergence of a homogenizing global culture (Robertson, 1992) that features the corporate-sponsored production of global cultural items and their equally strong consumption. This global culture is largely shaped by American values, practices, but also corporate interests to the point that it is often viewed as nothing more than the spreading of American culture at the global level (Antonio & Bonanno,

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2006). American music, TV, films, and lifestyle are readily available to, and consumed by, millions of people and American cultural icons such as Coca Cola and MTV are popular among people around the world. This widespread acceptance of this Americanized global culture has diminished and/or eliminated long-established local differences and characteristics, radicalizing reactions, and delegitimizing hegemonic discourses. It engendered strong responses that revive local cultural features and sentiments that serve to invigorate antiglobal and anti-American movements (Barber, 1995). These movements are rooted in different cultural spheres and traditions, but all resist the homogenizing forces of American globalization and create one of the most visible characteristics of globalization: resistance to it.

THE CRISIS OF THE STATE OR THE CRISIS OF THE FORDIST NATION STATE As indicated earlier, a number of authors characterized globalization in terms of the compression of time and space and capital hypermobility (Harvey, 1989; Dicken, 1998; Sassen, 2000). Others stressed the notion of global sourcing: the ability of corporate actors to search for the most convenient factors of production worldwide (McMichael, 2002; Bonanno & Constance, 2006). Often, however, hypermobility of capital and global sourcing have been discussed in association with the crisis of the state (Arrighi, 1998; Ohmae, 1995; Robinson, 2004). Arguably one of the most fundamental changes attributed to globalization is that the state is viewed as increasingly incapable of regulation of global activities as capital moves at velocities and with scopes that cannot be handled by existing state institutions.14 Different actors (transnational corporations, financial corporations, and even labor) bypass or elude state regulations and rules and make state borders ‘‘porous’’ and state actions ineffective. Simultaneously, the state is seen as being increasingly unable to effectively address demands stemming from subordinate groups. Those state-sanctioned practices and institutions that under Fordism were employed to address the needs of subordinate classes, but also control them, are increasingly ineffective. In many instances, the state cannot play the role of able counterpart to subordinate groups. This understanding of the crisis of the state requires some clarifications. First, the crisis of the state should be understood in terms of the crisis of the Fordist nation state. Under globalization, state institutions have experienced

Introduction

21

difficulties in coordinating and regulating capitalism while meeting social, economic, and political expectations stemming from their Fordist past. In this context, the new spatial and temporal dimensions of global capital mobility clash with the temporal and spatial dimensions of the Fordist nation state. In effect, while globalization has not transcended capitalism (Arrighi, 1998; Chase-Dunn, 1998; Hirst & Thompson, 1996), it has altered the conditions that allowed the nation state to effectively coordinate and regulate capitalism. Because for most of the 20th century these conditions were embodied in Fordism, their alteration meant the crisis of the Fordist nation state and its institutions rather then the crisis of the ‘‘state.’’ Under capitalism, the state has experienced recurrent crises. But and as recognized by classical social theorists such as Marx and Weber, capitalism has always mandated a political system that coordinates and assists capital accumulation, while controlling opposition and legitimating capitalist social relations (Arrighi, 1998; Habermas, 2002; Pitelis, 1991). These roles have been the prerogatives of past state forms whose crises have ushered in new state forms. Historically, the emergence of earlier quasi nation-state forms of the state, such as the city-states of Venice and Genoa, was followed by the creation of regional states like Holland. As these early forms of the capitalist state experienced crises, they were replaced by the establishment of nation states such as Great Britain, France, and Spain and the international nationstate system that governed the expansion of capitalism for most of the last three centuries. Later, the US imperial form of the nation state emerged (Arrighi, 1998; Pitelis, 1991). Accordingly, under capitalism the nation state has been the most common form of the state because it was the most effective institution for the control and regulation of capitalism and promotion of capital accumulation. Second, under globalization, the nation-state form of the state is experiencing a crisis as the social conditions that shaped this form of the state have been altered. Two items should be mentioned here. First and as indicated above, production is now largely decentralized and organized around networks that are based on the practice of global sourcing. Global sourcing is often characterized by the ‘‘race to the bottom’’ (Harvey, 2005; Robinson, 2004) whereby less expensive factors of production are sought. Additionally, global sourcing has meant the search for political and cultural conditions that enhance the turnover of capital. As resistance to these practices emerge, production and its coordination and regulation are progressively removed from the sphere of the nation state and placed under the sphere of new and spatially larger than nation-state institutions. They have taken the form of supranational states (such as the European Union),

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global economic regulatory organizations (such as the WTO), and entities that transcend the public sphere (such as the NGOs). They have also been placed under the sphere of institutions that are spatially smaller than the nation state. Regional districts and industrial parks are examples of new forms of coordination of production. This new situation offers advantages to transnational capitalists as barriers to the faster reproduction of capital are reduced and/or eliminated. Simultaneously, this situation is also contradictory as the ability of the nation state to support ‘‘home’’ enterprises in the global competition becomes more problematic. This contradictory situation rests on the very transformations undergone by the nation state and the practices of transnational corporations. The transnationalization of corporate operations makes the identification of ‘‘home’’ corporations difficult, while the complexity of corporate interests and their global scope limit the ability of the nation state to identify objectives and strategies of intervention. As neoliberal policies eased fiscal pressure on corporations, the transnationalization of economic activities reduces the ability of the nation state to tax enterprises and, therefore, obtain financial resources. The net result is the contradictory corporate tendency to weaken the nation state’s ability to support economic activities and, simultaneously, demand the use of this diminished strength to support global capital accumulation. The second item is related to the above. The end of Fordism and the hegemonic position of those social groups that promote globalization resulted in the internal transformation of the nation state. Symbolized by the adoption of neoliberal ideology and measures (Harvey 2005, 2006; Sassen 2000), a great number of nation states – and certainly the most powerful world nation states – have removed many if not all of those items that characterized their Fordist past (Sassen 2007). Nation states have opened and deregulated their markets, reduced and reorganized their welfare systems, abandoned prolabor measures, and enhanced support for corporate interests and the upper classes. Accordingly, the status of the nation state under globalization is as much the outcome of the impact of global forces as it is the result of its internal transformation. Nation states and their regional counterparts – once the motor forces of regulation and control of undesirable consequences of capitalism – actively contributed to the elimination of rules and regulations that hampered the free mobility of capital (deregulation). They effectively engineered the opening of their economies and the creation of conditions amenable to corporate interests but often adverse to labor, communities, and environmental well-being (reregulation).

Introduction

23

Third, the crisis of the Fordist nation state is the crisis of the progressive state. While under Fordism the state exercised strong forms of class-based social control, it also established conditions that significantly benefited subordinate classes (Habermas 2002; Harvey 1989). The Fordist welfare state achieved levels of support of subordinate classes that were unprecedented in the history of capitalism (Dicken 1998; Harvey 1989). While current state social intervention remains uneven, as nation states adopted neoliberal postures and restructured their delivery of social services and intervention in socioeconomic matters, those conditions evaporated. Socioeconomic inequality increased as economic expansion and the wealth that it generated were unevenly distributed.15 As the cost of basic needs and services (i.e., health, education, housing, transport) became increasingly expensive and state support was replaced by access fees, levels of wages and salaries remained stagnant.16 The net result has been the creation of a ‘‘privatized’’ nation state whose disengagement for social intervention and the provision of social services characterizes its existence in the global era.

THE ORGANIZATION OF THE VOLUME The book is divided into two parts. The first consists of chapters that discuss cases whose spatial and temporal locations evolve primarily in South America. The second part, conversely, deals with cases that unfold primarily in North America. In must be noted that while the empirical evidence discussed in the following pages find their roots in specific locations, these are cases of globalization and, therefore, should be read as examples of the global reorganization of time and space. The first chapter by Ben Selwyn is entitled ‘‘Workers in Global Commodity Chains: The Organization of Labor in Export Grape Production.’’ It probes the issue of commodity mobility and the implications that it has for labor both in terms of its conditions and strength. Dwelling on the concept of hypermobility of capital and on the implications that it has on the organization of agrofood commodities, this chapter analyzes the organization of labor in the export grape production in North East Brazil. It is argued that transnational investments have significantly restructured the production of export grapes in Brazil by creating dependency on transnational commodity circuits while, at the same time, transforming the local labor market. The result is an influx of capital that has dynamic outcomes. However, it also implies higher level of control of labor and exploitation of natural resources whose costs are disproportionally distributed to local groups. The chapter documents new ways in which labor

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is controlled in this spatially and temporally redefined situation. Simultaneously as labor is exploited, some of its more specialized segments are empowered. This local specific strength is a product of the opening of territories typical of globalization. It is concluded that this contradictory situation of empowerment/disempowerment and mobility/rigidity synthesizes the effect of capital mobility in this segment of the agrofood sector. The second chapter ‘‘Capital Mobility and New Workspaces in FruitProducing Regions of Brazil and Argentina’’ by Josefa Salete Barbosa Cavalcanti, Mo´nica Isabel Bendini, Dalva Maria da Mota, and Norma Graciela Steimbreger investigates capital mobility and its implications through a comparative analysis of two regions, one in Brazil and the other in Argentina. Focusing on the globalization of the fresh fruit sector, it studies the impact that the insertion of local production into global circuits has on local firms and labor. While geographically distant, these areas face the effect to the same global imperatives and mechanisms. The marginalization and precarious status of labor and the labor structure are documented. Also documented are the conditions that engender the growth of local firms but also generate their weakness. In the third chapter ‘‘Labor Mobility in the Field of Agriculture and Food Globalization’’ Gustavo Henrique de Souza Dias and Josefa Salete Barbosa Cavalcanti analyze significant trends in the mobility and reorganization of labor in key agrofood sectors in Latin America. They focus their analysis on the development of the new types of agrofood workers – truck drivers of fresh fruits – who characterize the organization and development of commodity production circuits and chains. Paying particular attention to the connection between global phenomena and the local dimensions in which they become explicit, the chapter documents the new forms of domination that this spatial and temporal reconfiguration entails along with the emancipatory opportunities that labor has been able to create. The second part of the volume opens with Joa˜o-Paulo Bola Sousa’s chapter entitled ‘‘The Changing Character of Small Town Ontario: Transnational Capital/Labor Flows in a Not So Globalized World.’’ Sousa argues that contemporary Ontario’s rural economy is a dynamic source of job creation with significant employment opportunities in distinct economic sectors such as manufacturing, agrifood, and service. However, despite these relatively favorable trends, this author contends, the spatial transformation taking place in the region engendered contradictions. As the agrifood sector seeks inexpensive and reliable labor force to deal with heightened competitive pressures and falling commodity prices, transnational autoparts firms have looked to small town Ontario as a fertile ground to locate new

Introduction

25

‘‘flexible,’’ niche manufacturing facilities. Employing the case of two communities, the chapters contends that while small town Ontario has managed to benefit partially from opportunities linked to a globalizing economy, the formal and informal means of socially incorporating the new transnational labor force is lagging significantly behind, reflecting a regressive turn in labor-market regulation. Marie-Christine Renard is the author of Chapter 5 ‘‘Free Trade of Coffee, Exodus of Coffee Workers: The Case of the Southern Mexican Border Region of the State of Chiapas.’’ Renard contends that globalization reorganized the spaces and times though commodities are produced and labor is reproduced. She documents these spatial and temporal changes and the related new mobility of capital by probing the conditions of immigrant labor in the Southern portion of Mexico (state of Chiapas). As the US and Canadian economies depend on Latin immigrant labor, the same can be said for the export agricultural production of southern Mexico (coffee and bananas). This production is anchored in transnational and local circuits and largely depend on immigrant labor from Central America and Guatemala in particular. This situation creates a ‘‘domino effect’’ that is profoundly reshaping local social relations. While local workers migrate north, labor from Guatemala is employed, but also highly exploited, in the local export agrofood sector. This situation is compounded by the overt and uncontrolled violence against these immigrants who lack the ‘‘legal’’ and ‘‘political’’ identities to effectively resist violence. In this context, new patterns of spatial mobility of labor develop as established spatial enclaves and their temporal dimensions are bypassed and restructured. Chapter 6 by Douglas H. Constance and M. Kirk Jentoft is entitled ‘‘Global Productive Capital Mobility: the Case of Chilean Farmed Atlantic Salmon.’’ Employing a global value chain methodology, Jentoft and Constance study the case of the development of the cage-raised North Atlantic salmon industry. In particular, they explore the reorganization of time and space and capital mobility through an analysis of the global shift of cage-raised salmon from locations in the north to Chile in the south. Since the 1980s, Chile has been a major world supplier of North Atlantic salmon. Due to low costs of production and favorable legal and political climates, WalMart has sourced this production allowing it to offer salmon in the north to low-income consumers as an upscale product. The authors conclude by discussing the socioeconomic and environmental consequences of global sourcing and production also in light of the fact that this cageraised ‘‘salmon’’ is actually a genetically engineered fish whose presence creates negative environmental consequences locally.

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‘‘Trade and Poverty: Changes in Farming and Community in NAFTA’s First Decade’’ is the title of Chapter 7. Authored by Pablo Alvarez, Jason Barton, Kathy Baylis, and Marybel Soto-Gomez, this contribution studies one of the primary aspects of globalization: the proliferation of trade agreements. Designed to coordinate and regulate transnational flows of capital, commodities, and labor, trade agreements generated significant consequences at various levels. Since coming into effect on January 1, 1994, the North American Free Trade Agreement has had profound impacts on the Mexican people, especially those in the agricultural sector. Among other policy changes, the ejido system of communally owned land has moved away from the communal approach toward individual titling of land with the intention of allowing farmers either to use their titles as collateral toward capital investment, or to sell their land outright. The PROCAMPO program coincides with these policy changes as it is a cash transfer payment meant to aid farmers in the transition from subsistence agriculture to more capital-intensive forms of cash-crop monoculture. In this chapter, the authors probe the impact of increasing mobility of capital on poor farmers in Mexico. In particular, they investigate the effects of PROCAMPO, comparing ejido and non-ejido farmers using household-level census data from two different years (1994 and 2000) and across several states and municipalities in the north and south of Mexico. Results indicate that though the PROCAMPO program has been successful in helping many farmers in this transition process, those at the lower economic levels have had difficulty accessing the program due to lack of knowledge or other resources. They conclude by arguing that this case is an example of the importance of class in the analysis of the consequences of capital mobility. In Chapter 8, ‘‘Conclusions: The Contradictions of the Reconfiguration of Time and Space,’’ Alessandro Bonanno and Josefa Salete Barbosa Cavalcanti provide the conclusions for the volume. Dwelling on the evidence and analyses presented in the previous chapters, they make two related points. First, as capital moves at accelerated speed and reconfigures time and space and social relations, it creates new contradictions. Second, these contradictions affect disproportionally subordinate social groups. However, they also open up possibilities for emancipatory change as dominant actors are not free from limits or problems. In this regard, the authors examine the importance that social interdependence and the control and regulation of capitalism have as social relations become increasingly global. It is their position that it is possible to exploit these contradictions to create alternative patterns of socioeconomic development.

27

Introduction

NOTES 1. The case of ENRON is perhaps the most widely known. However, in the agriculture and food sector the most well-known case is that of Ferruzzi. This now defunct agrochemical transnational corporation used techniques based on frequent and rapid financial transfers to mobilize capital for bribing and other illicit activities. For a detailed account of the corporate use of financial transactions, see Bonanno and Constance (2008). 2. While some analysts argue that contemporary migratory flows do not exceed those in previous phases of capitalism (see Hirst & Thompson, 1996), in the global era, migration flows display unprecedented high levels and generate relevant social, political, and economic consequences (Robinson, 2004). 3. This does not mean that market mechanisms ceased to work. It refers to situations in which a higher demand for labor is accompanied by ‘‘the race to the bottom’’ and labor’s acceptance of depressed wages and poor working conditions. 4. The debate on the reform of the immigration legislation that took place in the US Congress in 2006–2007 serves as an example of this situation. While there was general agreement on the need to create new legislation, any attempt to change the current weak position of immigrant labor failed. Simultaneously, measures designed to contain illegal immigration flows also received limited support. It was clear that the ruling class was not interested in altering a situation in which it could economically benefit from the availability of inexpensive and docile labor and gain political advantage from the existence of an anti-immigrant ideology. 5. For heuristic purposes we will discuss time and space separately. However, as it will be clear later, time and space are relational entities that should not be understood in isolation from each other. 6. David Harvey (2000, pp. 22–25) criticizes the ‘‘linear’’ understanding of spatial expansion of capitalism employed by Marx. For Harvey, Marx assumes a posture that contemplates a progressive and cumulative spatial expansion of capital that moves from the core – that is, Europe – outward toward the rest of the world. Among other things, Harvey contends, this tenet would not be able to explain situations like the emergence of capitalist poles of development – such as Japan – and the uneven geographical development of capitalism. However, while Harvey’s criticism is sound, the importance of Marx’s points on the centrality of the relative and historical dimensions of capital mobility and the importance of its existence for the growth of capitalism remain unchanged. 7. In Marx’s view, this is both the case of primitive accumulation and the transition from feudal social relations to capitalist ones and in the evolution of capitalism itself. In both cases, space is constantly reorganized through the expansion of the forces of production and the changes in society that follow. 8. This point has been also recognized by contemporary sociologists. The works of Henri Lefebvre (1991) and Harvey (1989) are now considered seminal in this respect. They have been followed by a series of analyses that stressed the social construction of space. See, for example, Ward (2007), Pollin and Luce (1998), and Peck (2005). 9. In Capital, Marx describes this cycle employing the formulae M-C-Mu, in which money (M) is transformed into commodities that are subsequently transformed into

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an augmented amount of money (Mu). According to Marx, the difference between Mu and M is surplus value, and the objective of the cycle is the creation of profit ([1867] 1977, pp. 251–255). 10. In the essay ‘‘Space as a Key Word,’’ David Harvey (2006, p. 124) discusses the relational form of time and space proposed by Marx. Following Henri Lefebvre (1991), Harvey distinguishes three dimensions of space. First, there is ‘‘absolute space’’ that is the fixed space represented by preexisting structures such as the boundaries of a nation state or a city. Second, ‘‘relative space’’ is the space experienced from the point of view of the observer. It is relative to the time and position from which the observer stands. Accordingly, time and space may differ as the observer is located in one social or geographical location rather than another. ‘‘Relational space’’ is that defined by the process in which space exists. Space, in other words, is internal to that process. It follows that it is impossible to separate space from time. A particular space exists in so much as it exists in a particular time and vice versa. He contends that the relational understanding of time and space is the way in which Marx understands these two concepts. 11. An important point made by Marx is that the compression of time and space signifies a reshaping of the manners in which humans satisfy their needs. Through the acceleration with which commodities are produced and consumed, the entire ‘‘social time’’ is rearranged. Indeed, Marx recognized through it the fundamental concept of ‘‘socially necessary time for the reproduction of labor’’ that is the socially created and relative dimension of time and space necessary for the reproduction of the working class and the creation of surplus value. 12. For a detailed analysis of the standardization of time and space due to industrialization, see the now classical work by E. P. Thompson (1963) on the creation of the British working class. 13. To be sure, attempts to organize capitalism were not an exclusive prerogative of Fordism. As indicated above, the evolution of capitalism has always been characterized by some forms of organization of production and consumption. Under Fordism, the organizational control of the nation state increased significantly along with the international control of key nation states such as the USA. 14. In the sociological debate on globalization, the issue of the crisis of the nation state is one of the most often discussed items. According to some authors, such as Arrighi (1998), Chase-Dunn (1998), and Hirst and Thompson (1996), the nation state is not experiencing a crisis and remains the center piece of capitalist development and also the sphere within which emancipatory actions can and should be developed. According to others, (Dicken, 1998; Harvey, 2005; Robinson, 2004; Sklair, 2001) global capital hypermobility has brought about a qualitatively different set of conditions for the accumulation of capital that make the position of the nation state significantly different from that it occupied in the past. For a detailed discussion of this debate, see chapter 1 of Bonanno and Constance (2008). 15. According to World Bank data (Milanovic, 2002), in 1993 the richest 1 percent of the world population controlled as much wealth as the lower 57 percent, while the richest 5 percent had an average income 114 times larger than the poorest 5 percent. From 1988 to 1993, this latest group grew poorer by loosing 25 percent of its income. Simultaneously, the top 20 percent of the population saw its income expanding by 12 percent. In 1990, the richest 10 percent of the countries had a median income that was 77 times greater than that of the poorest 10 percent. By 1999, this gap had

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increased to 122 times. From 1990 to 2001, the average personal income of developing regions as percentage of that of the United States diminished significantly (Sutcliffe, 2004). The average income in Latin America was 36 percent of that in the United States in 1990, but only 26 percent in 2001. Similarly, the average income of African countries was 10 percent of that of the United States in 1990, but only 6 percent in 2001. In the entire political south, the average per capita income as a portion of that of the United States dropped from 16 percent in 1990 to 14 percent in 2001. Income and wealth inequality grew also in the United States. According to census data (Mishel, Bernstein, & Boushey, 2003), in 2000 economic inequality in the United States was at the highest levels since the 1920s’ as the top 5 percent of all US households had a combined income that was six times larger than that of the lower 20 percent of households. This gap is four times larger than it was in 1970. Additionally, between 1989 and 2000 the gap between the rich and the poor increased. During this period the income of the top 20 percent of the households in the United States grew by an astonishing 68 percent. The income of the lowest 20 percent of households and that of the middle fifth experience much more contained increases: 9 and 15 percent respectively. Also, from 1989 to 2002, the after-tax income obtained by the highest fifth of the US population grew from 42 to 51 percent. Simultaneously, the after-tax income of the lowest 20 percent remained constant. Inequality is much more dramatic if measured in terms of overall wealth. In 2001, the top 1 percent of the US population controlled 33 percent of the wealth, while the bottom 90 percent of the population was left with only 28 percent of the wealth. In essence and as a recent report of the IMF indicates, economic inequality has risen across most countries and regions over the last two decades (IMF, 2007, p. 31). 16. In the United States in 1979, the average hourly wage was equal to $15.91 (in constant 2001 dollars). By 1989 it had reached only $16.63/h, a gain of only 7 cents a year. In 1995 this average remained virtually unchanged at $16.71. During the economic expansion of the late 1990s (1995 and 2000), it rose to $18.33/h. In 2006 it decreased to $ 16.66/h, virtually unchanged from its 1989 level (U.S. Department of Labor, 2007).

REFERENCES Aboites, G., Bonanno, A., Constance, D. H., Erlandson, K., & Martinez, F. (2007). La Construccio´n de Resistencias en UN Mundo Global. Mexico City: Plaza y Valde´s. Aglietta, M. (1979). A theory of capitalist regulation. London: New Left Books. Antonio, R. J., & Bonanno, A. (2000). A new global capitalism? From ‘Americanism and Fordism’ to ‘Americanization-globalization’. American Studies, 41(2/3), 33–77. Antonio, R. J., & Bonanno, A. (2006). Periodizing globalization: From cold war modernization to the Bush doctrine. Current Perspectives in Sociological Theory, 24, 1–56. Antonio, R. J., & Bonanno, A. (2007). Globalization and the new legitimation crisis. Paper presented at the Annual Meeting of the Midwest Sociological Society, Chicago, IL, April. Arrighi, G. (1998). Globalization and the rise of East Asia: Lessons from the past, prospects for the future. International Sociology, 13(1), 59–77. Barber, B. (1995). Jihad vs. McWorld. New York: Times Books.

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Barlett, D. L., & Steele, J. B. (1998). The empire of the pigs: A little known company is a master at milking government for welfare. CNN.com Nov. 30. Available athttp://www.cnn. com/ALLPOLITICS/TIME/1998/11/23/Pigs/html. Retrieved on October 31, 2004. Bell, D. ([1976] 1996). The cultural contradictions of capitalism. Twentieth anniversary ed. New York: Basic Books. Bonanno, A., & Constance, D. H. (2006). Corporations and the state in the global era: The case of seaboard farms and Texas. Rural Sociology, 71(1), 59–84. Bonanno, A., & Constance, D. H. (2008). Stories of globalization. University Park, PA: Penn State Press. Cardoso, F. E., & Faletto, E. (1976). Dependency and development in Latin America. Berkeley, CA: University of California Press. Chase-Dunn, C. (1998). Global formation. Structure of the world-economy. Lanham: Rowman & Little field. Constance, D. H., Gilles, J. L., & Heffernan, W. (1990). Agrarian policies and agricultural systems in the United States. In: A. Bonanno (Ed.), Agrarian policies and agricultural systems (pp. 9–76). Boulder, CO: Westview Press. Dicken, P. (1998). Global shift. New York: The Guilford Press. Ferna´ndez, A., & Ferna´ndez, D. (1990). The common agricultural policy: Meaning and functioning of institutional and market mechanisms. In: A. Bonanno (Ed.), Agrarian policies and agricultural systems (pp. 106–151). Boulder, CO: Westview Press. Frank, A. G. (1979). Dependent accumulation and underdevelopment. New York: Monthly Review Press. Friedman, T. L. (2000). The lexus and the olive tree. New York: Anchor Books. Giddens, A. (1990). The consequences of modernity. Stanford: Stanford University Press. Goldman, M. (2005). Imperial nature. New Haven, CT: Yale University Press. Habermas, J. (1975). The legitimation crisis. Boston: Beacon Press. Habermas, J. (2002). The European nation-state and the pressure of globalization. In: P. De Greiff & K. Cronin (Eds), Global justice and transnational politics (pp. 217–234). Cambridge, MA: The MIT Press. Harvey, D. (1989). The condition of postmodernity. Oxford: Basil Blackwell. Harvey, D. (2000). Spaces of Hope. Berkeley: University of California Press. Harvey, D. (2005). A brief history of Neoliberalism. Oxford: Oxford University Press. Harvey, D. (2006). Spaces of global capitalism. London: Verso. Hirst, P., & Thompson, G. (1996). Globalization in question. Cambridge: Polity Press. IMF. (2007). World economic outlook: Globalization and inequality. Washington, DC: International Monetary Fund. Jameson, F. (1994). Postmodernism or the cultural logic of late capitalism. Durham: Duke University Press. Lash, S., & Urry, J. (1994). The economy of sign and space. London: Sage. Lefebvre, H. (1991). The production of space. Oxford: Blackwell. Marcuse, H. (1964). One-dimensional man. Boston: Beacon Press. Marx, K., & Engels, F. ([1867] 1977). Capital. Vol. 1. New York: Vintage Books. Marx, K., & Engels, F. ([1885] 1992). Capital. Vol. 2. London: Penguin. Marx, K., & Engels, F. ([1848] 1998). The communist manifesto. London: Verso. McMichael, P. (2002). Development and social change. Thousand Oaks, CA: Pine Forge Press. Milanovic, B. (2002). The world income distribution, 1998 and 1993. The Economic Journal, 112(January), 51–92.

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Mills, C. W. (1959). The sociological imagination. New York: Oxford University Press. Mishel, L., Bernstein, J., & Boushey, H. (2003). The state of working America 2002–2003. Ithaca, NY: Cornell University Press. Ohmae, K. (1995). The end of the nation state: The rise of regional economies. New York: The Free Press. Peck, J. (2005). Economic sociologies in space. Economic Geography, 81(2), 129–175. Pitelis, C. (1991). Beyond the nation-state?: The transnational firm and the nation state. Capital & Class, 43, 131–152. Pollin, R., & Luce, S. (1998). The living wage: Building a fair economy. New York: New Press. Robertson, R. (1992). Globalization: Social theory and global culture. London: Sage. Robinson, W. I. (2004). A theory of global capitalism. Production, class and state in a transnational world. Baltimore, MD: The Johns Hopkins University Press. Sassen, S. (2000). Territory and territoriality in the global economy. International Sociology, 15(2), 372–393. Sassen, S. (2007). A sociology of globalization. New York: W. W. Norton. Sklair, L. (2001). The transnational capitalist class. Oxford, UK: Blackwell. Sutcliffe, B. (2004). ‘‘World Inequality and Globalization.’’ Oxford Review of Economic Policy 20:1. Thompson, E. P. (1963). The making of the English working class. London: Penguin Books. U.S. Department of Labor. (2007). Wages by area of occupation. Available at http:// www.bls.gov/bls/blswage.htm. Retrieve on September 6, 2007. Wallerstein, I. (1974). The modern world system: Capitalism agriculture and the origins of the European world economy in the 16th century. New York: Academic Press. Ward, K. (2007). Thinking geographically about work, employment and society. Work Economy and Society, 21, 265–276. Weber, M. ([1921] 1968). Economy and society. Vol. 3. Yotowa, NJ: Bedminster Press.

PART I SPACE AND TIME REORGANIZATION IN SOUTH AMERICA

CHAPTER 1 WORKERS IN GLOBAL COMMODITY CHAINS: THE ORGANIZATION OF LABOUR IN EXPORT GRAPE PRODUCTION$ Ben Selwyn ABSTRACT This chapter illustrates how labor is organized in a branch of exportgrape production in the Sa˜o Francisco valley, Northeast Brazil. It describes how Northern retailers’ corporate strategy involves continually improving product quality, and how grape producers respond to evolving demands by attempting to increase the skill content of labor and labor productivity. Simultaneously, relatively militant rural trade unions organize agricultural workers in the region, often staging strikes, achieving significant gains for workers, and continually attempting to $

The chapter is based on fieldwork carried out in 2002 and 2003 for a Ph.D. at SOAS under the supervision of Henry Bernstein. During this period, I conducted research on 26 farms in the SF valley using the participant observation methodology as formulated by Jorgensen (1989). I carried out semistructured interviews with farm managers, owners, and workers. I also carried out off-farm interviews and collected data from development agency staff, producer cooperatives and marketing boards, rural trade unions, and the local office of the Ministry of Labor.

Globalization and the Time–Space Reorganization: Capital Mobility in Agriculture and Food in the Americas Research in Rural Sociology and Development, Volume 17, 35–64 Copyright r 2011 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1057-1922/doi:10.1108/S1057-1922(2011)0000017004

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improve their position vis-a`-vis capital. As a response, farms go to significant lengths to recruit, retain, and discipline workers they consider to be good and relatively uninfluenced by trade unions. It is argued that in order to better understand strategies of firms and developmental outcomes in new regions of export agriculture it is necessary to pursue a three-pronged investigation, focusing simultaneously.

INTRODUCTION This chapter investigates how integration into high value horticultural export markets influences local capital–labor relations, and in particular the formation of local-level labor regimes. It does so by focusing on farm strategies of organizing labor in the irrigated Sa˜o Francisco (SF) grape branch, in particular its export segment, located in Northeast Brazil.1 It draws on literature concerned with global capitalist restructuring, and of agro-food systems in particular to investigate how increasing retailer power and export market conditions impact on how farms attempt to organize their labor forces. The chapter investigates how these attempts are codetermined by local conditions that provide both opportunities for firms achieving global competitive advantage, but also introduce specific rigidities, potentially undermining their competitiveness, to which they must respond.2 A focus on labor regimes is central to any broader understanding of determinants of workers’ pay and conditions and broader socioeconomic processes that contribute to a society’s developmental outcomes. The remainder of this chapter is organized as follows. Second section locates the study in the context of the literature concerning global capitalist restructuring in agrofood systems. Third and fourth sections provide a background to the study and an account of workers bargaining power in the region. Fifth section discusses farm employment strategies in relation to workers bargaining power. Sixth section discusses the findings in relation to conceptions of capital’s hypermobility, and the seventh section concludes the chapter.

Global Capitalist Restructuring, Agro-Food Systems and Transformations in Capital and Labor Mobility One of the most oft-repeated pillars of the globalization thesis is that not only has capital become more mobile than in the past (especially during the

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Bretton Woods period of capital controls and fixed exchange rates), but that it is hypermobile. Various authors claim frequently that we live in a ‘‘borderless’’ or ‘‘flat’’ world (Ohmae, 1990; Friedman, 2006), and that distance has ‘‘died’’ (Cairncross, 2001). In these accounts, technological innovations and market liberalization have freed capital from its previous territorial base. Such accounts generally assume that within this globalizing context, relatively immobile labor is at the mercy of increasingly mobile capital. Under these circumstances capital experiences fewer constraints as it determines the conditions under which it employs labor. For example, Castells (2006, p. 9) writes: Structural instability in the labor markets everywhere, and the requirement for flexibility of employment, mobility of labor, and constant reskilling of the workforce. The notion of the stable, predictable, professional career is eroded, as relationships between capital and labor are individualized and contractual labor conditions escape collective bargaining.

This chapter seeks to assess these claims by providing a case study of the relationship between capital and labor in a highly globalized economic branch and, in particular, by focusing on strategies pursued by farms to organize their labor forces. Before addressing some of the specificities of the globalization of agrofood systems and implications for labor, it is worth briefly suggesting some reasons why the capital hypermobility thesis might be exaggerated. The thesis combines a mix of technological determinism and capital-centrism in its assessment of capital–labor relations. Taylor (2007, p. 538) notes that the ‘‘complex interplay between the social embedding of production and the social reproduction of labor forces is shaped by struggles across a range of social institutions’’ (my emphasis), which include state regulation, firm employment strategies, practices of inclusion/exclusion that structure workforces (e.g., age, gender, social origin), and social relationships within the family unit. While under certain circumstances capital may have increased its mobility, these institutions are continually evolving in relation to each other, and it would be highly capital-centric to expect them all to change in ways that facilitate increased capital mobility. In order to better understand how increasingly mobile capital interacts with local social and spatial processes, Soja’s (1989) concept of the ‘‘sociospatial dialectic’’ is potentially useful. Here social (including economic) and spatial processes are conceived of as being mutually constitutive. Moreover, Harvey (1982) shows how productive capital, while always seeking to maximize its mobility vis-a`-vis labor in order to maximize

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profitability must structure the local economic landscape in certain ways favorable to it. These efforts include ensuring that firms (individually or collectively) can hire sufficient numbers of trained workers, that they have access to the necessary inputs, and that their finished commodities can reach their markets. To this we can add Herod’s (2001) observation that workers too, in their individual and collective ways, seek to structure the sociospatial landscape in their favor (e.g., by working in trade unions and achieving improvements in working conditions). The resultant, often contested, patterns of employment are what Deyo (2001) calls ‘‘‘labor systems,’’ which constitute the processes through which labor is ‘‘socially reproduced, mobilized for economic ends, utilized in production and controlled and motivated in support of economic goals’’ (ibid., p. 259). To put it another way, mutual attempts by capital and labor to structure the local sociospatial environment in their favor, respectively, mean that labor markets, even within the same economic branches and sectors will more than likely work in different ways in different places (Peck, 1996).

Capital and Labor Mobility in Global Agro-Food Systems The last three decades or so have witnessed a significant expansion and transformation of global food production and marketing. New technologies embodied in ‘‘cool chains’’ have facilitated and encouraged fresh fruit and vegetable (FFV) production and export in new regions of the globe that were previously too far from export markets, of which the present case study is but one example. Northern retailers have significantly restructured the procurement and marketing of FFVs as part of their competitive strategy (Gibbon & Ponte, 2005). In the United Kingdom, which is the highest value export market for SF valley producers, the value of imported fruit rose from approximately UKd1.47 billion in 1996 to UKd2.08 billion in 2006.3 During this period grocery market share of the top five supermarkets (Tesco, Sainsbury, ASDA, Safeway, and Somerfield – ranking refers to 1998) increased from 37.7 to 50.7 percent of the total market (Clarke, 2000, p. 980).4 There are similar tendencies elsewhere in Europe, and in large swathes of the developing world Reardon and Berdegue´ (2002). The retail revolution involves not just increasingly wide global sourcing, but also the subcontracting of supplying, and the imposition of ever-stricter requirements on producers (Dolan & Humphrey, 2000, 2004). Friedland

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(1994) utilizes the concept of ‘‘nichification of markets’’ to detail how the global proliferation of FFV production exists within a Transnational Corporation-organized and functionally integrated division of labor. Retail capital utilizes advanced technologies, and highly developed relations with subordinate buyers/importers to coordinate global sourcing of an increasingly wide variety of FFVs year-round. While these ‘‘hotspots’’ of globalized food production are geographically dispersed (Whatmore, 1994), and while farms may preside over different scales of production, have varying social origins, and social structures, production is highly standardized, according to fruit taste, shape, color, weight, sugar levels, production conditions, export quantities, and timing of delivery. However, Marsden, Lowe, and Whatmore (1992a, p. 5) note that food producing firms are ‘‘becoming more highly sensitized and specific about where and under what social conditions they wish to introduce and sustain production.’’ Hence, as Watts and Goodman (1997) show, the contemporary global system increasingly shapes and reshapes local patterns of agricultural accumulation and development, and Bee (2000, p. 257) notes that ‘‘agro export expansion rarely takes place in a pristine environment, rather it is overlaid on existing social, political and economic conditions y.’’ These observations suggest that newly mobile units and clusters of foreign and national capital will contribute to the generation of new workforces in locations already formed out of specific historical political economies of inclusion/exclusion from local, national, regional, and global markets. In turn, capital and labor will respond to pressures existing at numerous registers from the global to the local, and consequently, these new hotspots of agro-industry will generate specific forms of capital–labor relations. Murdoch (2000), following Marsden, Lowe, and Whatmore (1990) refers to ‘‘vertical’’ networks in agro-industry as indicating ways in which agriculture is incorporated into broader, nonrural, economic processes, such as the retailer practices mentioned above, and Bonanno, Busch, Friedland, Gouveia, and Mignione (1994) note how the globalizing and lengthening of such agro-food chains increases their sociotechnical complexity. These observations warn against making overly simple assumptions about the existence and effects of hypermobile capital. In short, and to foreshadow the findings of this chapter, there exist new sets of contradictions between capital and labor in the globalized agroindustrial sector. On the one hand newly mobile capital seeks to colonize new spaces in its search for profit maximization. It is aided in these attempts by technological innovations and processes of political economic

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liberalization. In the present case study retail capital has harnessed these changes in order to construct a system of highly organized global sourcing of fresh produce on a scale previously unparalleled. Retail capital can set regulations and specifications governing product and production process requirements, while other firms must conform to these demands if they are to maintain their presence in these new global commodity chains. In addition, state investments in irrigation in the SF valley (see below) have created a terrain that is favorable to productive capital as it seeks to integrate itself into high value export markets. However, these processes have also contributed to a process whereby a new labor force has emerged and has been able to organize itself to extract significant concessions from capital. Labor’s mobilizing power and its gains in turn influence and codetermine firm strategies. Hence, while firms may locate in regions because of the potential of achieving global competitive advantages, they may also contribute to the formation of sets of local conditions that ‘‘give rural workers action space or room for maneuver within which local strategies and styles of social action can emerge y and be sustained’’ (ibid., p. 5, original emphasis). In turn, understanding local firm strategies is important because they influence the process of accumulation, employment generation, and labor remuneration, which contribute to or detract from the development process. These observations are particularly relevant to the present study. While globalization has certainly generated new flexibilities for capital, production remains located in a particular locale, and biological aspects of agriculture impose strict limits on firm flexibility. Recalling Mann and Dickinson (1978) agricultural firms have a significantly different relationship with their workers than their industrial counterparts. Much of the success of agricultural firms rest on the ability to find ways of employing and utilizing labor to its best capacity in times of high demand, and then being able either to sustain employment, or to dispensing with it while there is little work to be done. Writers such as Goodman, Sorj, and Wilkinson (1987) have analyzed attempts by agricultural firms to overcome their specific, agro-biological character. They note large increases in plant productivity and increased control over plant characteristics that provide increased scope for the regulation of labor. Nevertheless, the present research investigates how, even in the favorable conditions of irrigated farming in the SF valley, farm labor requirements and employment strategies still fluctuate due to a combination of buyer and market requirements, agro-biological processes determining grape production, and capital–labor relations.

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BACKGROUND TO THE STUDY The SF valley grape branch is located in the interior of the Brazilian North East around the cities of Petrolina and Juazeiro (see Map 1). The region, commonly referred to in Brazil as the Serta˜o, is associated with drought and underdevelopment (Hall, 1978). However, over the last two decades or so an economic boom has occurred in the SF valley. Between 1985 and 1996 Petrolina’s GDP grew by an average annual rate of 7.46 percent (Agencia da Desenvolvimento Economico, 2001, p. 1). Between 1970 and 2000 Petrolina’s population grew at an annual rate of 4.3 percent and is presently the sixth biggest city out of the 186 in the state of Pernambuco (Agencia da Desenvolvimento Economico, 2001, p. 1). The boom was stimulated by large-scale state investments in irrigation in order to stimulate economic development. In 1960 the Northeast Brazil as a whole had approximately 52,000 ha of publicly irrigated land, which increased to 261,000 ha in 1980 and 619,000 ha in 1988 (Souza, 1990, p. 483). By the late 1990s in the SF valley alone there were over 40,000 ha of publicly irrigated land and an additional 60,000 ha of privately irrigated land (Selwyn, 2007a, p. 86). The economic boom has been driven primarily by the expansion of a large fruiticulture sector, and within it a strong export-grape branch that began emerging in the mid-1980s (Cavalcanti, 1999, 2006; Damiani, 1999; Gama, 2001; Selwyn, 2007a). In 1991, fruiticulture accounted for 5,293 ha (14 percent) of the total area of all crops planted on public irrigation projects and by 1997 for 17,336 ha (47 percent) (Correia & Marinozzi, 1999). By 2001, the major fruiticulture crops grown in the region were, approximately, in hectares: mango 16,500, coconut 10,000, banana 5,500, and grape 4,500 (Valexport, 2002). Between 1997 and 2001 the two main crops produced for export – mangoes and grapes – increased their foreign exchange earnings from US$ 18.6 million to US$43.4 million and from US$ 4.7 million to US$ 20.4 million, respectively (Valexport, 2002, p. 16).

Grape-Branch Composition In 2001 there were 1,407 grape farms in the SF valley comprising approximately 4,500 ha of vineyards.5 The branch is divided between small, medium, and large farms as follows: 81 large farms, above 10 ha, 5.7 percent of the total, with around 46 percent of all vines cultivated; 201 medium farms, of between 3 and 9.9 ha, 14.4 percent of all grape farms with

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Map 1.

The Sa˜o Francisco Valley, Northeast Brazil.

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Table 1.

Farm Market Orientation and Operations Performed per Cultivation Cycle.

Export Destination UK Mainland Europe Top-end domestic Bottom-end domestic

Number of Operations per Cycle 34 24 20 9

Source: Interviews with farm managers.

24 percent of vines; 1,125 small farms, below 3 ha comprising 79.9 percent of all grape farms with less than 30 percent of all vines. Producers sell onto four main markets, which, in order of stringency of buyer requirements (see Table 1) are as follows: the UK market, to supermarkets such as Tesco and Sainsbury; the Mainland European market to supermarkets such as Carrefour and also to wholesale markets; the top-end Brazilian market, to supermarkets such as Bom Preco and Pa˜o de Ac- u´car: the bottom-end domestic market, to local, regional, and national wholesale markets. Farms vary in their social origins, ownership structure, and size. The majority of large farms originate from international and national industrial and commercial capital. For example, Brasil Uvas (100 ha),6 originally called Fazenda Mandacaru´, was taken over and renamed by the British company Sea Containers, which specializes in international maritime transport. Carrefour, one of the largest global food supermarket chains, established three farms in the region, Vale das Uvas (153 ha), Labrunier, and Organica. Nationally owned farms include Frutimag, owned by a magnesium-producing firm from the state of Minais Gerais in the South Centre of Brazil. Logos Butia (76 ha) is owned by an engineering consortium, whose owners come from different coastal cities in the North East and South East of Brazil, and JMM (18 ha) by agricultural capital from Parana. Special Fruit (140 ha) originates from the expansion of a mediumsized farm. Its owner Suemi Koshiama, a Brazilian of Japanese origin, initially came to the SF region with Cotia in 1983 and started grape production with other Cotia members on the Curac- a´ irrigation district, before moving to private land in order to expand his enterprise.7 Other large farms originate from the North East and elsewhere in Brazil, with investments by agricultural and industrial capital. For example, Andorinhas is owned by industrial capital based in Recife, and Agrivale by Agrovale that also owns a 1,300 ha sugar cane plantation in the SF valley.

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Most medium farms are owned and managed by Brazilians originating from the horticultural sector, and investors entering horticulture for the first time. A large number of medium farms operate within the Juazeiro Agricultural Cooperative (Cooperativa Agricola do Juazeiro – CAJ), itself an offshoot from the Cotia agricultural cooperative, originally established in Sao Paulo.8 CAJ is still associated with ethnic Japanese–Brazilians. Medium-sized private investors come from a wide range of backgrounds. They include university teachers (Jailson Lira de Paiva, with 8 ha), agronomists (Recifense with 9.6 ha), and (Edmilson dos Santos with 6 ha), commercial fruit dealers (Raimundo Filho with 5.4 ha), lawyers (Guru Carrigo with 6 ha), and former CODEVASF, SUDENE, and other public sector agency and private sector staff.9 The majority of small producers are commonly referred to in the SF valley as colonos or settler farmers, as many originate from nonirrigated farming in the Caatinga scrub vegetation. Colonos can be distinguished from medium investors, with the latter often only farming the same amount or slightly more land, primarily by their reliance on family labor and social origins. Correia and Marinozzi (1999, p. 2) calculate that, across all crops, they rely for more than 50 percent of labor input on family members.

Labor Process, Export Windows, Workers Bargaining Power SF valley grape producers must meet rising buyer and market requirements if they are to export to the United Kingdom and mainland Europe. For example, over the last decade and a half they have had to increase grape berry size from 17 to 25 mm. Other upgrading activities undertaken by SF producers include sourcing of cheaper inputs, market diversification (selling onto different export markets, and using different brand names to sell to different buyers within the same markets), the establishment of export standard packing houses, and producing according to methods required by corporate supermarkets, such as meeting Eurepgap standards.10 Such upgrading necessitates higher skill content of labor and an increasingly complex and scientific management of the labor process (Selwyn, 2007b). Farm managers and agronomists constantly experiment with new production techniques. Most large exporting farms pay expert consultant agronomists for advice and guidance. As part of their product upgrading (producing higher quality grapes) exporting farms have increased the number of operations performed by workers. Table 1 shows that exporting farms carry out close to three times

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more cultivation operations for mainland Europe and almost four times more operations for the UK market than farms producing for sale onto the bottom-end domestic market. Operations include bunch and branch pruning, application of pesticides and fertilizers, soil analysis, tying back branches, cutting back shoots, and sugar content analysis before harvest. Failing to carry out operations on time results in the production of lower quality fruit. A farm owner explained that ‘‘a bad pruning delays the whole cycle, leaves bunches too tight and can spoil the whole bunch. Also, with bunch thinning the berries may be touched too much by the workers, which leaves them with stains later on, and you have lower quality berries.’’11 SF farms produce during two export ‘‘windows,’’ of approximately eight weeks each, in May–June and November–December when other regions in the world are unable to produce because of climatic conditions. It takes approximately 17 weeks from initial fertilizer application to the harvest of export quality grapes.

Workers Bargaining Power Workers, organized by rural trade unions, in particular the STR or Sindicato de Trabalhadores Rurais, have been able to win significant concessions from exporting farms in the SF valley. This is in notable contrast to grape-producing regions elsewhere in the world. For example, Kritzinger, Barrientos, and Rossouw (2004) find that farms in South Africa supplying large northern retailers are subject to pressures of increased domestic liberalization, competition and increased quality-related buyer requirements, experience intense price fluctuations. Under such conditions they respond by shedding permanent labor, and replacing it with contract labor, with significant adverse effects for conditions of employment and pay. Gwynne (1999) and Korovkin (1992) also show that work conditions in Chilean export-grape production are characterized by the displacement of permanent workers by especially women temporary workers. By contrast to these cases, workers in the SF grape branch have experienced improved conditions over the last two decades. In the 1980s with the emergence of the grape branch, work conditions were harsh. As a lawyer from the STR recounted: Before we had the collective agreement, working on grape farms could be very dangerous. Workers were transported to the farms on top of Lorries, they had to apply insecticides without using protective clothing, they might hurt themselves at work and not be able to continue working, and then the boss would sack them. Lunch breaks were

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However, since the mid-1990s trade unions have been able to negotiate significant improvements to the pay and conditions of their members. These include basic pay 10 percent above the national minimum wage, overtime payments up to 70 percent above the basic rate, paid maternity leave, the provision of on farm cre`che facilities, the right to trade union representation, and the provision of safe transport to work. How have workers in the SF valley grape branch made such significant gains, in particular compared to other regions of export-grape production? The STR has been central to the amelioration of workers conditions, principally through its ability to mobilize workers to take strike action on farms, during periods when the latter are particularly vulnerable to short stoppages.13 The STR’s strategy of mobilizing workers in the grape branch emerged in tandem with the branch’s expansion. In the early 1990s the STR began holding meetings with workers aimed at generating support for a collective agreement between large and medium farms and trade unions. It quickly gained the support of large number of workers and was able to pressurize farm owners, organized within the employers’ organization VALEXPORT, to concede a collective agreement. Initially the collective agreement covered issues such as wages and basic working conditions. However, since its establishment, the STR has succeeded in inserting new terms into the agreement, in particular in relation to women’s work conditions; for example, the provision by farms of cre`ches. The STR’s ability to communicate with and mobilize workers is part of understanding workers relatively strong bargaining power vis-a`-vis farms. Another part relates to farms structural vulnerability to suspensions of labor during production. As mentioned, the complexity of grape production has increased as a consequence of rising retailer demands. For example, production cycles on farms exporting to the United Kingdom market usually consist of up to 34 operations within the 17-week cycle. By contrast, colonos producing for the bottom-end domestic market only require about 13 operations in order to produce grapes (Selwyn, 2007b, p. 536). Operations on exporting farms must be carried out at specific times because delays lead to the production of lower quality fruit. This means that exporting farms are particularly vulnerable to short work stoppages during the production cycle. The STR recognizes their structural power vis-a`-vis farms, and transforms it into associational power through mobilizing workers during peak periods of production.14 In short, the STR calls strikes

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during the production cycle, in the full knowledge that this is when farms are most vulnerable, and most likely to concede improvements to the collective agreement. The above has provided a basic outline of the emergence of the SF grape branch, producer strategies for integrating themselves into high value export markets, and also shows how workers have won significant concessions from exporting farms. This is only half of the story. The following sections detail how farms respond to workers bargaining power, and try variously to limit it.

Farm Employment Strategies Labor Recruitment and Retention Estimates of the number of workers in fruiticulture branches in the SF valley vary. One suggests that approximately 40,000 wage workers across the valley were involved in irrigated agricultural production in the mid-to-late 1990s (Damiani, 1999, p. 14). According to Damiani (ibid.) 29,000 worked in the grape and mango branches, these being the principal export crops. In the mid-1990s, Bloch (1996, p. 49) estimated that approximately 20,000 workers were employed in the grape branch alone. The local Ministry of Labor and rural trade unions provide similar estimates, although accuracy of their data is difficult to assess. The percentage of labor forces employed on permanent contracts on large exporting farms is between 50 and 60 percent. On large and medium exporting farms permanently employed labor constitutes either half or an outright majority of the labor force (Selwyn, 2007a). This is in significant contrast to other world regions of grape production, such as Chile (in 1993) and South Africa (in 1994) where permanent workers constituted around 17 and 36 percent, respectively, of the total workforce (Barrientos, 2001, p. 86; Barrientos, 1999; Kritzinger & Vorster, 1995). The difference can be explained primarily by the production of more than one grape crop per year in the SF valley by the majority of farms. As noted there are large inflows of migrants from other regions seeking work that contribute to the existence of a large pool, or reserve army of labor. Further, that the grape branch has been established since the early 1980s means that there also considerable numbers of unemployed workers in the region with experience of grape production. In addition, unemployment rates in rural Brazil are very high. Singer (1997) reports that in 1990 for Brazil as a whole, for urban areas in the North East, and for rural areas

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in the North East, the percentages of the economically active population outside formal employment sector were approximately 48, 62, and 89 percent, respectively. He also notes that the figures are higher for the North East as a whole because of the higher unemployment rates there compared to the rest of Brazil, and for the rural North East because its economically active population is disproportionately engaged in family agriculture compared to the rest of Brazil.15 These figures and the existence of a sizeable pool of relatively skilled and experienced workers in the valley would suggest that farms face few difficulties in recruiting and retaining relatively skilled workforces. Indeed, in the context of high unemployment, permanent, formal sector work is greatly prized. However, far from simply employing locally based workers farm managers go to significant lengths to select and maintain what they consider to be optimal workforces. The rest of this section outlines these strategies, and discusses the reasons for them. It focuses on where farms recruit workers from, their attempts at maintaining seasonal workforces over the medium-to-long term, and farm strategies for retaining and disciplining workers. Geographical Patterns of Recruitment Some farms in the SF valley recruit their workforce from the immediate region. For example, Brasil Uvas, Vale das Uvas, Andorinhas, and Frutivit all recruit the majority of their workforces from the urban areas. They provide buses that pick up workers every morning from Petrolina and Juazeiro. Logos Butia recruits most of its labor from the nearby town of Curac- a´. It is too far – over an hour and a half by bus – from Petrolina or Juazeiro for the farm to transport workers from these cities daily. However, many farms hire the majority of their labor force from neighboring states to Pernambuco and Bahia, such as Ceara, Piaui, and Paraiba. Long Distant Recruitment Managers are particularly careful about the composition of farms’ permanent workforces. Many perceive workers from outside the region as being harder working and more disciplined than local labor. Their agricultural background and lack of contact with the local rural trade unions contribute to this perception. The manager of Agrivale explained ‘‘we prefer male workers from the interior; they work harder, are more dedicated, and have a higher productivity.’’16 Ceara, Piaui, Paraiba are amongst the poorest states in the Brazilian federation, have high rates of unemployment (Singer, 1997) and regularly experience drought, which undermines family-based dry land farming. There

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are high levels of out-migration to the coastal cities and to the major metropoli of Sa˜o Paulo, and Rio. A manager on Special Fruit explained: The majority of our workers are from Ceara. Why? Because Cearenses do not have a river, there is no irrigation, and they have suffered more in their region. They are more religious and the people who are more religious are easier to lead than those who are not religious.

He contrasted Cearenses to local labor: Those workers who live in this region of Bahia and Pernambuco have always had the river, they never had a great difficulty in surviving and their lives are easier. But the Cearense does not have water, does not have anything, and so places a higher value on his work than workers from this region.17

Migrant workers are very much aware of the benefits of permanent work. On Agrivale, a worker contrasted the differences between his previous life in the dry interior and his present life. ‘‘There we used to cut back a lot of scrub vegetation to clear the land to plant seasonal crops such as rice, beans and corn. Here we only have to work on the grape vines.’’ Another worker on a large exporting farm concurred: I lived in the interior, working with animals [goats, sheep, and chickens] and when it rained we planted some beans, melon, onions y there is no irrigation there, so we only worked when it rained. This is the first firm I have worked like this y. We did not have regular work there, and thank God there is a firm here where we can work and get a regular wage.18

A manager from Special Fruit explained how workers from Petrolina and Juazeiro are considered the most difficult and least flexible. He defined flexible as: A worker who understands our needs, and accepts that we might need to work on holidays or at weekends since if we do not the quality of the crop may be damaged. A worker from the local urban area says ‘‘No, a holiday is a holiday and I’m going to rest.’’ He doesn’t understand that it is the farm that gives him his bread [money], and we cannot force them to work since they are not slaves. But those workers who have suffered more in their own regions better understand our situation and see that if the farm is having difficulties he will work to help the farm.19

Here, then, is a clearly developed labor recruitment strategy and attendant rationale practiced on a number of exporting farms in the region. A flexible and hard-working labor force is a premium, and farms are prepared to expend considerable resources in recruiting whom they consider the right workers. However, the question still remains of how farms recruit workers?

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Main Methods of Recruitment Recruitment proceeds mostly on the basis of preestablished contact between hired and potential workers and farms. For the majority of employers the most common form of recruiting new labor, both permanent and temporary, is through word-of-mouth. The best chance workers have of gaining employment is to be known as a capable worker where they live. It is quite uncommon for workers to get work through an impersonal and direct application to the farm itself. One worker put it like this: I came from Oricuri [a town about 2 hours from Petrolina] where I worked distributing Coca-Cola and other drinks. I had a friend here, he told me I could get a job with him at FruitFort, I went with him and he introduced me to the manager, and that’s how I got my job.20

This method is utilized for both local and long-distance labor recruitment. When there is a vacancy for a particular task, managers inform their present workforce, and ask them to bring potential candidates to the farm at a specified time. Managers make it clear what skills they want, for example, a worker who is good at cutting back or pruning bunches, pesticide application, or harvesting. When the prospective worker arrives they are interviewed, perform a field test where their skills are assessed, and if successful, they are contracted for a trial period, usually of 30 days. Employers use this system for a number of reasons. First, it effectively externalizes labor recruitment costs. Rather than bearing the time and costs of searching for new applicants, with all the problems of not knowing whether the candidates have the appropriate skills and characteristics (see below), employers can rely on a well-established network of current and potential workers. The second important reason for this method is that recruitment via word-of-mouth exerts a pressure of responsibility onto the newly hired worker as well as onto the already employed introducing worker, which, in turn, implicitly suggests a level of trust between the introducing worker, the recommended worker, and the farm. The former has a responsibility for the behavior of their new colleague and vice versa. This method enhances farms’ patronage power. They represent a present and future source of employment not just for the present worker and applicant, but potentially, for their family and friends. The owner of JMM explained: We have a good relationship with our workers and they know how we place a high value on good work. They know what type of workers we want to employ, and when we need a new worker here, they are the first we ask to help us.21

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Farms including Special Fruit, Agrivale, JMM, and the CAJ also employ more elaborate long-distance methods of recruiting labor. They also tend to employ and house members of the same family. Workers are mainly recruited from the interior states such as Ceara and Piaui. When managers want to recruit new labor, they often ask current workers if they know of anyone who would be suitable. The process is similar to the word-of-mouth recruitment practices already mentioned, but it also involves currently employed workers contacting by telephone, or traveling to their home to bring back potential candidates. These farms have a high percentage of workers who are from one particular location. For example, Special Fruit and the CAJ cooperative recruit many workers from Juazeiro de Norte in Ceara. Some of the CAJ employers have been able to retain more than 50 percent of their workforces, from Ceara, since starting production from the early to mid-1980s, as well as hiring additional workers. While managers are very careful in how they create permanently employed workforces, they also pursue quite elaborate strategies for retaining seasonal workers over the medium-to-long term. The Role of Permanent Seasonal Workers The retention of temporary workers is a major concern to farms and managers trying to build up permanent seasonal labor forces, that is, a group of workers who are employed on temporary contracts, according to the cultivation cycle, but are subsequently reemployed (Barrientos, 1999; Bee & Vogel, 1997). This is a relatively common phenomenon in export horticulture, and these workers have also been referred to as ‘‘permanent– temporary’’ labor forces. An exporting farmer explained: The biggest difficulty for us is forming a team [of workers]. You have different workers coming in for every cycle. We want to have the same ones every cycle, but it is not always possible y The problem is that you take on a new worker, and they have their own way of doing things-maybe they are good at cutting back shoots, but not bunch pruning and you have to teach them again how to do the operations. When you have a team, you have the same workers doing the same operations each cycle.22

Farms utilize a number of methods to try and build up a permanent seasonal workforce. One is to inform preferred workers at the end of the cycle that the farm wants to employ them again for the following cycle. Managers tell them the date of the start of the next production cycle and when the worker should come to the farm, register, and start work. Farms that are relatively isolated from other farms and urban areas, such as Logos Butia, and recruit their labor from the surrounding area, are able to develop

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quite reliable permanent seasonal labor forces because they often offer the best employment opportunities, as there are few other grape farms in the immediate region. The manager of Logos Butia claimed that he was able to rehire around 80 percent of the farm’s temporary labor force from one cultivation cycle to the next. In contrast, managers on Andorinhas, which is relatively close to Petrolina, said they got significantly less than 50 percent of the same workers for more than one cycle. Some of the larger farms such as Special Fruit, Brasil Uvas, and Vale das Uvas have still more sophisticated methods of retaining permanent seasonal workers. They have computer databases of preferred seasonal workers, which enable the latter to arrive at the start of the cultivation cycle without going through an interview process. The farms also use newspaper and radio advertising, as well as sending cars with loudspeakers circulating the towns and villages where the temporary workers live, to inform them of the farms’ requirement for labor. Special Fruit, which recruits especially from regions outside the valley, also provides transport to the farm from Ceara and other relatively far-off regions. Retaining and Controlling Labor Recruitment, retention, and control of high-quality workers, both permanent and permanent–seasonal, are essential for the smooth functioning of exporting farms. Effort and cost in training, managing, and supervising labor is partially wasted if there is high labor turnover. Moreover, the value of experienced labor is increasingly important as the pressure to upgrade means that exporting farms increasingly need workers who are able to implement and work according to new practices. Also at certain times of year, especially harvesting and packing, farms need workers to work longer hours and weekends. Controlling labor is important because of the influence of the rural trade unions in the region. The threat of strikes and worker discontent affecting productivity has influenced many farms to introduce schemes to bind workers closer to the farm in an attempt to increase workers ‘‘loyalty.’’ Many farms in the valley including Agovale, JMM, Special Fruit, and CAJ farms house their workers on farm, often providing free housing, or charging relatively low rents of around BR$5–10 per month, compared to around R$50 per month rent for a house paid by many families in the urban centers. They are able to use provision of housing for individuals and families as a method of exerting direct social control over workers. For example, the consumption of alcohol is prohibited, and male workers are prohibited from bringing girlfriends to their homes.

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CAJ farmers house the majority of their workforce on their farms. The male workers have permanent contracts while most of the female workers are temporary. CAJ farms do not experience ‘‘interference’’ from rural trade unions. The overall approach of the CAJ members is well summed up by the cooperative’s president: For most of the CAJ producers the workers usually live on the farms ... We think that to have good workers, they need to be living well. If you have a worker living on your farm, then their links to the farm will be greater than those workers who live in the city y Imagine if you had a worker living in a favela [urban slum], you would not know him or what his life is like, you don’t know about his family, you don’t know about his problems. He can arrive at your farm with a head full of problems. When you have the worker living on the farm, the links are greater; you are showing that you are doing something for them. And on the other side of it, the majority of big farms have problems with the trade unions. On our farms they do not enter the farm to ask the worker not to leave his house in order to strike. They lose access to the farm. They may block the road or the entrance, but they will not get into the farm.23

Farms such as Special Fruit prefer their resident male workers to be married, with their wives, and sometimes children also living on the farm, as they will be ‘‘looked after,’’ as well as having a responsibility for their wives and families. A manager explained ‘‘they have a better life living here on the farm, they only have to get up at 6.55 [work on Special Fruit starts at 7], they have 2 hours for lunch between 11–1, they get to their house at 11.05, their wife prepares them their lunch, they can sleep for over an hour, they finish work at 5, and they are at home at 5.05.’’ The manager elaborated how workers liked to create families, and that those that came to the farm and did not succeed in doing so usually left within a year.24 Single male workers are aware of their relative disadvantage compared to their married coworkers: ‘‘We have to cook our own lunch, when it gets to lunch time you are hungry and you just want to eat, but you still have to cook.’’25 This system of housing workers makes it extremely difficult for rural trade unions to communicate with workers outside their designated visiting time during farms’ lunch break.26 Special Fruit has never experienced a strike.27 CAJ farm owners confirmed that housing and controlling workers in such a way is quite a common employer strategy across the grape branch. Human Resource Management Since 2000 large exporting farms have begun introducing human resource (HR) management, social programs, and the use of psychologists to vet, monitor, and retain workers. These schemes aim to raise worker loyalty and commitment to the farm. They are also designed to drive a wedge between

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workers and rural trade unions as farms present themselves as offering workers better opportunities for improving their individual and family lives. A human resource manager explained how they have introduced the social programs in order to attempt to reduce worker absenteeism: Before [the HR programme] there existed a relationship on the farm – between worker and manager – the worker was coming to work simply to earn money, without any commitment to the farm beyond its role as providing an income. Today the relationship is different. The farm helps the workers and vice versa y if the farm is working well then the workers are well, and if the workers are well the farm is well y It’s like a marriage.28

Social programs are multifaceted. One aspect consists of awarding prizes from light household goods and food baskets to bicycles to workers who have not been absent for six months – with prizes increasing in value for every additional six months that the worker has not been absent. Another scheme offers free dental and eye tests to workers who have not been absent. The program is designed to achieve several objectives: (a) to increase worker loyalty to farms, (b) to increase worker productivity through retention of relatively skilled, disciplined, and hard-working workers, and (c) to weaken potential and real links between workers and rural trade unions. Unlike the small-scale and colono farms, medium and large farms are a focal point for rural trade union activity (Selwyn, 2007b). Social programs include celebrating various events such as International Women’s Day (March 8), when women workers are provided with free cancer smear tests, and International Workers Day (May 1), when all workers are given free general health checks. During these days work proceeds as normal, with the exception that each worker takes their turn to receive the service provided. Services are provided to all workers, permanent and temporary, regardless of their absenteeism, or productivity rates. Managers regard such programs as highly effective: ‘‘Last year [2002] there was a strike by the rural trade union y but we did not lose one day of work. Our workers did not support the strike, because we look after them.’’29 Human resources includes more than the provision of services. It involves an attempt by large farms to cultivate the more multistranded relationships between managers and workers. A common theme emphasized by managers is that: ‘‘when you have people who are happy they work better y. On this farm we like to know all the workers and know how they are and we like to be able to talk to them in order to make sure they are fine. This is very important for the functioning of the farm.’’30 A further aspect of human resource management is the practice of subjecting workers to psychological testing and observations. A primary

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aim of such profiling is to establish whether they have what the manager’s regard as a serious attitude toward work, or are potentially disruptive. Large exporting farms employ psychologists to interview and monitor worker progress. Initial interviews of workers are designed to ascertain their approach to work and whether they see themselves as good workers. In addition, other aspects of their lives are enquired into such as what sort of leisure they enjoy and what they ‘‘plan to do with their lives.’’ Workers who express an interest in activities such as sport and watching television, and who aim to create a family and build or purchase their own house are considered good workers. Those who enjoy being single and like drinking and chasing women are considered bad. This profiling is important as most managers claim that a major problem they face with male workers is that of alcoholism. Once workers are employed, they are closely monitored: ‘‘the minute we see a problem, like a drop in productivity, we call them to human resources, and we ask him how he is, what he feels like, if he has any problems, what we can do for him.’’31

Globalization of Food and Agriculture and Capital Flexibilities and Rigidities This chapter has discussed how capital has been formed in, and located to the SF valley in order to benefit from a section of the grape branches’ incorporation into high value export FFV markets. It has detailed how rural workers have been able to extract significant concessions from farms through exploiting the latter’s vulnerability to short, sharp disruptions in the labor process leading to rapidly deteriorating fruit quality. Farms have responded in a variety of ways in order to maximize their control over labor and thereby reduce the rigidities they face in production and export. Farm strategies represent attempts at labor control that are to be found in widely varying contexts. Farms have responded to rising buyer requirements by attempting to train, recruit, and retain higher skilled workers. This is not surprising. In her study of strawberry farm sharecropping systems in California, Wells (1984, p. 7) uses the phrase ‘‘quality of labor’’ to pinpoint where the ‘‘pace, efficiency, timing, and inventiveness of labor’’ is crucial to production. The examples provided above suggest that on exporting farms quality of labor is a crucial component in successful export-grape production. However, the quality of labor does not by itself guarantee such production. Workers need to be recruited, retained, disciplined, and supervised in the production process.

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As already mentioned, formal sector employment in rural Northeast Brazil is particularly hard to come by. Farm managers are aware of this and they purposefully use contracts not only as a means to employ workers, but also as methods of tying workers into close relationships with farms and their managers, in order to minimize political instability. Richards (1979, p. 486) writes of peasant-based economies that ‘‘secure employment and assured subsistence were understandable incentives in societies where the low standard of living of the bulk of the population places the struggle for subsistence squarely at the centre of daily life.’’ This scenario can be applied to examples in the grape branch where employers deliberately recruit labor from very poor regions, and simultaneously use them to recruit new workers. Indeed, such employer strategies have been observed elsewhere, and Eswaran and Kotwal (1985) argue that while permanent contracts offer the potential of security and stable employment to a far greater degree than that available on the open market, these are often gained in exchange for loyalty, self-supervision, and various forms of subjection. The need to obtain and retain high-skilled workers and minimize labor costs is heightened on exporting farms because through various campaigns rural trade unions have been able to regularly mobilize worker. As Collins (1995, pp. 59–60) notes, the ‘‘political dimension is central to firms as they seek to avoid any disruption of the productive process.’’ Farms have developed a number of mechanisms to reduce the threat of disruption by labor including provision of very cheap on-farm housing, provision of jobs to workers’ family and friends, and even sophisticated human resource management systems, following well-established patterns of corporate paternalism observed elsewhere (Kerr, 1954). The provision of these services and benefits to workers are clearly double-edged. On the one hand, they represent real improvements to conditions compared to the period of the emergence of the grape branch. On the other, they constitute mechanisms of social and political control. In another context, Freund (1991, p. 12) observes that employer strategies of providing subsidized or free housing represents ‘‘the ideal blend of freedom and control,’’ and Ortiz (1993, p. 44) notes that employers often try to increase their control over labor by personalizing relationships through ‘‘complex, interlinked contracts’’ rather than presiding over contracts that simply exchange wages for labor power.

CONCLUSIONS This chapter started by highlighting accounts of capital hypermobility and the claim that restrictions to capital mobility have been significantly reduced

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(even eliminated) during the phase of globalization. A direct consequence combined with relative labor immobility, is that the balance of power between capital and labor has shifted decisively in favor of the former, with the implication that it can increasingly (even totally) determine the conditions under which it employs labor. The chapter sought to investigate the extent to which these claims are accurate, based on an examination of export horticulture in the SF valley. The findings suggest, however, that such claims simplify reality and consequently miss out on the complex, tension-laden, and often contradictory processes that shape capital–labor relations in the valley, and quite probably, more widely. An alternative analytical framework was proposed using literature concerned with capital restructuring and agro-industrial dynamics that enables a more nuanced investigation of these relations and processes. This chapter shows how both capital and labor in the SF valley grape branch seek to position themselves advantageously vis-a`-vis each other in the accumulation process. These attempts are conditioned by myriad processes, pressures, tensions, and contradictions that exist both at the local level and that arise as a consequence of participation in highly competitive export markets. Revolutions in the cool chain have enabled production in new regions of the world, significantly enhancing the mobility of agricultural capital. However, such enhanced mobility is intrinsically connected to processes of integration into highly competitive export markets where retail capital sets many of the parameters for participation. That is, while, on the one hand, productive capital has gained mobility because of the retail revolution, on the other, it is also disciplined and to an extent regulated by retail capital, which in turn potentially generates certain new rigidities. Consequently, the present case study shows how retailer demands for highquality fruit require farms to employ relatively skilled labor. In addition, the fortuitous conditions of the SF valley, which allow two harvests per annum, combined with the increasingly complex specificities of grape production has handed labor significant structural power. Well-organized rural trade unions have been able to translate structural power into associational power through high levels of labor mobilization and in particular through effective strike action that has resulted in a significant improvement of workers pay and conditions since the mid-1990s. The contest between capital and labor for a more advantageous positioning in the accumulation process does not stop there, however. Farms have developed numerous strategies of recruiting, retaining, disciplining, and ideologically influencing labor. In sum then, this case study highlights some of the tensions generated by the reorganization of time and space under contemporary globalization. While agro-food systems have certainly been restructured, in the process

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creating new investment opportunities for productive agricultural capital, the latter is still (and will always be) closely enmeshed in its local sociospatial environment. These new hotspots of agro-industrial accumulation may result from enhanced capital mobility, but they also give rise to new rigidities. Agricultural capital in the SF valley has responded by formulating strategies to minimize or overcome these rigidities, hence adding another complex ingredient to the process of the formation and evolution of the local sociospatial environment. Future research, rather than a priori assumptions of capital mobility, will show how the capital–labor dialectic unfolds in this (and other) corner(s) of the world. This chapter details how farms in the SF valley have benefited significantly from participation in export FFV markets and it also shows that they are subject to numerous pressures, rigidities, and contradictions that are both globally and locally generated. First, producers benefit from enhanced mobility in that state-constructed irrigation systems provide them with a highly propitious location from which to supply to global markets. However, their integration into these markets is dependent upon them achieving the evolving and highly demanding standards set by northern retailers. This creates a second tension. Producers must be able to organize production in relation to the agro-biological specificities of grapes such as the length of the harvest cycle. However, in order to do so, they require skilled, disciplined labor. The relative recent emergence of the region as a hotspot of export agro-industry means that skilled workers are highly valued. Furthermore, despite the SF valley’s location within a region renowned for its abundances of unemployed labor, farms’ meeting of retailer requirements forces them to draw from and retain a relatively limited number of skilled workers. The flexibility/rigidity dynamic is also experienced by the regions newly created agro-export workforce. On the one hand, workers in export-grape production are relatively (compared to other workers in the regions agricultural sector) well remunerated and enjoy relatively good working conditions. On the other, they are very tightly managed, subjected to strict discipline and modern working practices and must fulfill evolving and rising employer demands of them. Moreover, while workers are well organized in rural trade unions, farms in turn are using complex and advanced management systems and strategies to insert a wedge between workers and trade unions. Second, lead firm and market demands governing fruit quality impose specific requirements upon farms above and beyond those imposed by the

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agro-biological nature of the crop. Third, SF farms produce for the export windows of May–June and mid November–mid January, which means that production must be organized and conducted very precisely. These prerequisites that farms must meet if they are to participate in higher value commodity chains are determined by the supply and demand of grapes on export markets, lead firm competitive strategy, and the agro-biological requirements of grape production. Much GCC analysis has been insightful in detailing these processes in other cases (Dolan & Humphrey, 2000, 2004). However, that farms must meet these requirements is one thing. That they must do so within a given and specific location – the SF valley – is something quite different. In the SF valley, farms face a well-organized and relatively militant rural trade unions movement. Under these circumstances farms utilize quite complex recruitment, retention, and disciplining strategies to ensure that they have access to workers who will conform to the strictures of export-grape production, showing how while firms must respond to lead firm and market requirements, they must do so within an already given, but continually evolving sociospatial environment. To put it another way, labor regime formation in the SF grape branch is influenced by a combination of global and local processes that in turn generate new flexibilities and rigidities that exporting firms must attempt to at least adapt to, and at best overcome. In turn rural trade unions face new challenges of representation and leadership as employers attempt to divide them from workforces and convince workers that they, rather than the trade unions, represent their best interests.

NOTES 1. I use the term ‘‘branch’’ in accordance with the convention of conceptually dividing the economy into sectors (e.g., industry and agriculture) and ‘‘branches’’ with specific activities within each sector, for example, grape versus grain production within the agricultural sector. 2. I use the term ‘‘farm’’ when discussing the physical location of production and ‘‘firm’’ when discussing ownership structure. 3. Data available at http://statistics.defra.gov.uk/esg/publications/bhs/2007/ fruit%20details.pdf, accessed on March 2008. 4. The category ‘‘grocery’’ encompasses foods such as FFVs and meats, as well as small household goods. 5. This and the following data are derived from the Censo Fruticultura 2001 do Vale do Sa˜o Francisco produced in CD format by CODEVASF, the latest available.

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6. This and the following data refer to the number of hectares in cultivation in 2003. Only the farms with the number of hectares under vines referenced were visited for research. 7. Cotia was formed by Japanese settlers in Brazil in the 1920s. It assisted upward mobility amongst its members in Brazil. Makabe notes ‘‘With one crop after another, the Japanese came to dominate a narrow, highly specialised band of agriculture’’ (1999, p. 708). COTIA members contributed significantly to the emergence of high quality grape production in the SF valley. They had been producing table grapes in Sa˜o Paulo since the 1970s and brought their experience to the region. For more details see Makabe (1999), Damiani (1999), Gomes (2004), and Selwyn (2007a). 8. The Juazeiro Agricultural Cooperative (Cooperative Agricola de Juazeiro – CAJ) is the biggest grape cooperative in the SF valley, marketing grapes and other fruits produced by its members. In 2003, it had 45 members with 300 ha under grape production. In 2002, CAJ sold approximately half a million 8.5 kg crates of grapes on the domestic market and 350,000 crates on the export market. At the time of my fieldwork the cooperative was expecting to export close to half a million crates for the 2003 year, around 4,500 ton. 9. CODEVASF – Sa˜o Francisco River Basin Commission (Commisa˜o do Vale do Sa˜o Francisco), SUDENE – Superintendency for the Development of the North East (Superintendencia do Desenvolvimento do Nordeste). 10. For Eurepgap, see http://www.eurepgap.org/Languages/English/index_html and Rabobank (2001). 11. Interview with Kashaki Kabaka, CAJ, 2003. 12. Interview with Sidrone da Silva Neto, Petrolina, July 2002. 13. For more on the STR’s evolution and strategy, see Selwyn (2007b). 14. For the distinction of structural and associational power see Wright (2000) and Silver (2003). 15. Available at http://ilo-mirror.library.cornell.edu/public/english/bureau/inst/ papers/1997/dp94/index.htm 16. Interview with a farm manager from Petrolina, July 2003. 17. Interview with agronomist, Special Fruit, June 2003. While Special Fruit recruits a large percentage of its workers from Ceara, farms in the region recruit from elsewhere in the North East and further afield. The principal authority on these matters is Cavalcanti (1999), see also Cavalcanti et al. (2006). 18. Interviews with workers, Logos Butia, Curac- a´, March 2002. 19. Interview with manager, Special Fruit, June 2003. 20. Interview with a worker from Petrolina, May 2002. 21. Interview with owner, JMM, Petrolina, 2003. 22. Interview with Edmilson dos Santos, Petrolina, September 2003. 23. Interview with CAJ President, Jauzeiro, June 2003. 24. Interview with manager at Special Fruit, Juazeiro, July 2003. 25. Interview with worker at Special Fruit, Juazeiro, July 2003. 26. Rural trade unions have the right established in the collective convention – the annually negotiated agreement between trade unions and employers – to enter farms for 1 hour during lunch breaks in order to make contact with their members and establish whether their rights are being upheld by the farms.

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27. Confirmed by managers and workers on Special Fruit, and local rural trade unions. 28. Interview with social program director, Vale das Uvas, 2003. 29. Interview with manager at Brasil Uvas, June 2003. 30. ibid. 31. Interview with a psychologist, Special Fruit, March 2003.

ACKNOWLEDGMENT Alessandro Bonanno and Salete Cavalcanti are greatly acknowledged for help in preparing this chapter.

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Kritzinger, A., & Vorster, J. (1995). The labor situation in the South African Deciduous Fruit Industry. Western Cape: University of Stellenbosch. Kritzinger, A., & Vorster, J. (1995). The Labour Situation in the South African Deciduous Fruit Industry. University of Stellenbosch: Stellenbosch. Makabe, T. (1999). Ethnic Hegemony: The Japanese Brazilians in Agriculture, 1908–1968. Ethnic and Racial Studies, 22(4): 702–23. Mann, S., & Dickinson, J. (1978). Obstacles to the development of capitalist agriculture. Journal of Peasant Studies, 5(1), 466–487. Marsden, T., Lowe, P., & Whatmore, S. (1990). Introduction: Questions of rurality. In: T. P. Marsden, P. Lowe & S. Whatmore (Eds), Rural restructuring: Global processes and their responses (pp. 1–19). London: Fulton. Marsden, T., Lowe, P., & Whatmore, S. (1992). Labor and locality: Uneven development and the rural labor process. London: David Fulton. Ministerio da Agricultura e do Abastecimento. (1997). Programa de Apoio e Desenvolvimento da Fruticultura Irrigada do Nordeste. Brasilia. Murdoch, J. (2000). Networks — a new paradigm of rural development? Journal of Rural Studies 16(41) October 2000, 407–419. Ohmae, K. (1990). The borderless world. New York: Harper Business. Ortiz, S. (1993). Market, power and culture as agencies in the transformation of labor contracts in agriculture. In: S. Ortiz & S. Lees (Eds), Understanding economic processes (pp. 43–59). New York: University Press of America. Peck, J. (1996). Work-place: The social regulation of labor markets. New York: Guilford. Rabobank. (2001). Fruit Traders in Trouble. Utrecht. Reardon, T., & Berdegue´, J. (2002). The rapid rise of supermarkets in Latin America: Challenges and opportunities for development. Development Policy Review, 20(4). Richards, A. (1979). The political economy of gutswirtschaft: A comparative analysis of Prussia, Egypt and Chile. Comparative Studies in Society and History, 21(4), 483–518. Selwyn, B. (2007a). Export grape production and development in Northeast Brazil. Ph.D. dissertation. Department of Development Studies, School of Oriental and African Studies, University of London, London. Selwyn, B. (2007b). Labor process and workers’ bargaining power in export grape production, Northeast Brazil. Journal of Agrarian Change, 7(4), 526–553. Singer, P. (1997). Social exclusion in Brazil. International Labor Organization. Available at http:// ilo-mirror.library.cornell.edu/public/english/bureau/inst/papers/1997/dp94/index.htm Silver, B. (2003) Forces of Labour: Workers’ Movements and Globalisation since 1870. Cambridge: Cambridge University Press. Souza, H. (1990). O impacto Da Irrigacao Sobre of Desenvolvimento do Semi-Arido Nordestino: Situacao Atual e Perspectives. Revista Economica do Nordeste. 21(3/4), 481–517. Soja, E. (1989). Postmodern geographies: The reassertion of space in critical social theory. New York: Verso. Taylor, M. (2007). Rethinking the global production of uneven development. Globalizations, 4(4), 529–542. Valexport. (2002). Valexport e a Fruiticultura no Vale do Sa˜o Francisco. Petrolina, Brazil. Watts, M., & Goodman, D. (1997). Agrarian questions. Global appetite, local metabolism: Nature, culture and industry in Fin-de-Siecle agro-food systems. In: D. Goodman & M. Watts (Eds), Globalising food: Agrarian questions and global restructuring (pp. 1–32). London: Routledge.

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Wells, M. (1984). The resurgence of sharecropping: Historical anomaly or political strategy? American Journal of Sociology, 90(1), 1–29. Whatmore, S. (1994). Global agro-food complexes and the refashioning of rural Europe. In: A. Amin & N. Thrift (Eds), Globalization, institutions and regional development. Oxford: Oxford University Press. Wright, E, O. (2000), Working-Class Power, Capitalist-Class Interests, and Class Compromise. American Journal of Sociology, 105(4): 957–1002.

CHAPTER 2 CAPITAL MOBILITY AND NEW WORKSPACES IN FRUIT-PRODUCING REGIONS OF BRAZIL AND ARGENTINA Josefa Salete Barbosa Cavalcanti, Mo´nica Isabel Bendini, Dalva Maria da Mota and Norma Graciela Steimbreger ABSTRACT This chapter probes the issue of capital mobility and its implications in the context of the globalization of the fresh fruit sector. In particular, it explores the relationship between productive capital and labor in two different Latin American regions: the Northeast of Brazil and Patagonia in Argentina. Employing a comparative approach, it studies the impact that the insertion of local production into global circuits has on local firms and labor. These relatively culturally and geographically distant locations are affected by similar phenomena created by the globalization of agrifood. Relevant among then are the marginalization of labor and a weak labor structure. While there has been the growth of local firms, this growth has not erased important weaknesses. Globalization and the Time–Space Reorganization: Capital Mobility in Agriculture and Food in the Americas Research in Rural Sociology and Development, Volume 17, 65–81 Copyright r 2011 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1057-1922/doi:10.1108/S1057-1922(2011)0000017005

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INTRODUCTION In recent decades the opening of markets associated with globalization and the concomitant acceleration of the mobility of capital created significant changes in the production and distribution of agricultural commodities. Technological advancements in agriculture associated with the modernization of transport – especially with the introduction of refrigerated chambers and the construction of basic infrastructure – favored the development of new productive areas along with the restructuring of traditional agricultural regions. The clashing of exogenous investments and actors with indigenous cultures, institutions, and histories created the contested terrain in which the development of new agricultural areas took place (Steimbreger, Radonich, & Bendini, 2003, p. 49). Favored by the emergence of new lifestyles, fresh fruit production represented one of the answers to the establishment of new aesthetic standards about the body, quality of consumption, and the adoption of diets that are rich in vegetables throughout the year (Cavalcanti, 2006; Bendini, 1999; Pedren˜o, 2003). The creation of new productive spaces and favorable conditions for capital hypermobility has been affected by the role of the state and the availability of a highly flexible labor force. The state has been active through investments in productive infrastructure – irrigation, energy, transport – the establishment of policies and credit, as well as for its role in supporting some social actors to the detriment of others (Bonanno, 1998; Cavalcanti, da Mota, & da Silva, 2002). High levels of labor flexibility have been possible due to the availability of socially vulnerable workers who are employed seasonally and precariously, paid low wages, and offer very limited political resistance. These characteristics are present in the new agrifood regions worldwide (Lara & de Grammont, 1999). The production of fruits and vegetables is concentrated in the South and it is intended for consumers in the North. It is not a coincidence, therefore, that transnational corporations in the North control finance, production of knowledge, and distribution of commodities, and direct the demand of production in the South. As well stated by Bonanno (1999), in spite of increasingly selective consumption, a new international division of labor has emerged and it is controlled by the North. In this chapter we study two fruit-producing regions in Argentina and Brazil. Through the comparison of two areas located in the Northeastern portion of Brazil and North Patagonia in Argentina, respectively, we probe the manner in which agricultural globalization affects specific actors, culture, and social relations (Polanyi, 1992). In particular, the chapter discusses the differences and similarities of these two regions with particular

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emphasis on the use and conditions of labor as these two areas are affected by the same processes yet are parts of two different socioeconomic and political contexts (Sabourin, Caron, & Tonneau, 2005). One of the two regions is the Valle Medio (middle valley) in the Rı´o Negro Province in the North of the Argentinean Patagonia. It is characterized by the availability of large extensions of land with fertile soil and the availability of water. These environmental conditions were exploited for the implementation of intensive agriculture based on fast-growing crops such as pears, apples, and grapes. Because of these comparative advantages, local firms were able to expand and respond to the growth of the international demand for fresh fruits (Bendini, 1999; Cavalcanti, 1999; Cavalcanti, da Mota, & da Silva, 2002; Steimbreger et al., 2003). The other region is the Neopolis Plateau located in the Brazilian Northeast in the lower San Francisco Valley of the state of Sergipe. In this region, the growth of fruit production was also the result of comparative advantages. But differently from the case of the Valle, it was also promoted by state programs. Also differing from the Valle, the peace and quality of this growth were hampered by the heterogeneity of the local firms and the decision to produce commodities (i.e., coconut, citrus fruits, and bananas) that encountered difficulties in international markets. The Valle is located along the river Rio Negro, in the Rio Negro province. The region extends for approximately 2,000 km2 and is divided in two subareas with different social and productive characteristics. The irrigated area contains the most important towns and services and it is also where fruit production is concentrated. The semi-arid part features scattered human settlements and beef and sheep production. Currently, fruit production occupies the largest portion of the 38,000 acres of cultivated land. In 1994, 5,769 acres were devoted to fruit production with 3,597 acres dedicated to apple production, 1,487 acres to pears, and 685 acres to other commodities. In 2002, the land used for fruit production grew to 7,959 acres, an increase of about 20%. The Plateau has a total area of 7,500 km2 and contains 35 farms ranging in size from 20 to 600 acres. The most significant portion of land (35%) is devoted to the production of coconuts. A number of other commodities such as banana, corn, mango, citrus fruits, passion fruit, and melon are also produced. These commodities are mostly sold to local markets. Only coconuts are marketed outside the region to the South and Southeast of Brazil. Agrifirms use most of the irrigated land along with some small farms producing rice and sugarcane. A local ceramics industry coexists with agriculture. These are mostly very small establishments employing local women.

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The Role of the State The state played a significant role in both regions. Yet it acted in a significantly different manner in Brazil than in Argentina. In Brazil it adopted a kind of traditional Fordist approach, whereas in Argentina it actively opened domestic markets and progressively scaled back its intervention. Following established patterns of agricultural modernization, the Brazilian government provided planning and guided investments. It intervened through selective programs centered on the creation of developmental ‘‘poles,’’ wage-based employment, and the introduction of advanced technology. In the case of the Plateau, the state took the initiative to irrigate vast areas of semi-arid land to promote intensive agriculture. This intervention was carried out through the introduction of an innovative partnership with private actors. In this scheme, planning and construction of irrigation infrastructure were prerogatives of the state, while investments in farms, technology, production, and commercialization were left to private initiative. Since the 1970s, the Argentinean State began a process of economic liberalization. Centered on tax abatements, it triggered a flow of foreign direct investment in agriculture. In the 1980s, this process of global opening intensified, significantly changing the production of established agricultural commodities. In the 1990s, the active deregulation and privatization of the industry integrated much of Argentinean agriculture into global circuits. The overall results were increased competiveness in the sector and internationalization of the domestic economy. The latter engendered a number of relevant phenomena including growth in exports, enhanced dependence on foreign food products, and increased local presence of foreign corporations. In effect, there was a significant penetration of transnational capital through mergers, joint ventures, and acquisitions that caused much higher levels of concentration in the production, processing, and distribution of food items. In this context, diminished public control and the end of state-sponsored programs in favor of economically weaker regions and groups created problems for a significant portion of the population.

Expansion and Recolonization of Productive Spaces Though distant and shaped by different historical circumstances, these two regions represent examples of the reorganization of space characterizing

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globalization. In a recent past, these irrigation-dependent arid regions were characterized by the presence of large latifundia farms. From the end of the 19th to the mid-20th century, the productive structure of the Valle remained unchanged with hay and, to a lesser extent, beef as the most often produced commodities. In the case of the Plateau, latifundia employed landless peasants who cultivated rice in sharecropping schemes. Sharecropping forced these peasants to withstand their subordinate position in order to have access to land (Casanova, 1979; Mota, 2005). Pushed by attempts of the state to modernize agriculture, in the 1970s this system was abolished. It was replaced by an irrigation and land distribution program carried out by the Companhia do Desenvolvimento do Vale do Sa˜o Francisco e do Parnaı´ba (CODEVASF) – The Sa˜o Francisco and Parnaı´ ba Valleys Development company designed to promote rice production on small farms. While land was distributed and irrigation structures created, this program accommodated only a small fraction of the peasants. Ultimately, only one-third of those who requested land received it in property. Additionally, and due to the small size of the newly created farms, these operations remained entirely dependent on state subsidies. As a result, a large portion of peasants either emigrated from the Plateau or became wage workers. Furthermore, the implementation of the CODEVASF project was the subject of a dispute between local workers and the government who wanted the exclusion of native workers from possible access to land. In the case of Valle, the establishment of irrigated intensive agriculture began in the early 1950s when the national government financed an irrigation system aimed at the cultivation of 20,000 acres. As irrigation infrastructures were completed and new farms established, tomatoes became the dominant crop and its production increased steadily. However, pears and apples also began to acquire importance. Production was carried out on small farms with low levels of productivity, limited use of technology, and often through sharecropping. In the 1980s, change began to occur, favored by the introduction of free-market-oriented economic policies. Through market opening new legislation, the national government directed private investments to cattle production in low productivity areas, areas adjacent to the nation’s borders and in Patagonian. These were agricultural areas where the application of technology was deemed appropriate to increase the exploitation of natural resources. Both foreign and domestic companies acquired large pieces of land at low costs, diverting capital from other activities. However, despite these investments, the region’s productive structure did not change substantially until the 1990s (Steimbreger, 2004).

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Changes in the 1990s In the 1990s and following the worldwide restructuring of agrifood, an intense process of modernization occurred that centered on the expansion of land use and the growth of fruit production. In Argentina production went primarily to international markets. In Brazil it was directed to local and international markets. Both local and transnational firms participated by responding quickly to the expansion of global demand. Capital concentration also increased through the establishment of oligopolistic forms of production and distribution. In the Valle, large firms diversified operations – combining fruit production with horticulture, grapes, and even cattle – increased efficiency, brought new areas to production, and enhanced vertical integration (Teubal, 1999). They also grew larger as they averaged more than 700 acres of cultivated land. The largest domestic fresh fruit firms, Exporfrut, controlled 2,600 acres of cultivated land in the area and produced pears, apples, and grapes. Expofrut (transnational capital), Kleppe (domestic capital), Mon˜o Azul (domestic capital but recently acquired by a foreign corporation), Sabbagg (domestic capital), and Salentein (Dutch capital, recently established in the region) all operated in the Valle. The case of Expofrut exemplifies this growth. The corporation began its activities in the early 1970s in that portion of the Valle that has traditionally been devoted to agricultural production. A few years later, it signed agreements with German firms to produce off-season products for the German market using Argentinean firms and growers. Following the success of this business initiative, Expofrut grew to become a transnational firm specializing in the export of apples first and horticultural products and fruits later. In the late 1980s, a second commercial alliance was established with the Italian ‘‘trading’’ firms Gruppo Bocchi, the largest distributor of fruits and vegetables in Europe. After a few years, Expofrut began buying land in newly established productive areas located in the valleys of the rivers Negro and Neuque´n. Its objective was to develop its own large-scale production following new international market requirements. Vertical integration, the diversification of agribusiness activities (canned vegetables and fruits), and the production of fresh fruits – especially grapes – accelerated. By the turn of the new century, the Bocchi group acquired the rest of the stocks still in Argentinean hands and gained full control of the firm. Recently, Bocchi merged with the Belgian group Univeg (Steimbreger, 2004). In the Plateau firms specialized in the production of coconut and citrus and diversify their activities with investments in other sectors such as

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construction, retailing, and public services. Coconut production is predominant and exclusively sold to the domestic market. This lack of international markets constitutes the most significant difference between the two areas as it hampered the economic growth in the Plateau. Small-scale farming associated with a large presence of commercial intermediaries reduced profit margins and prevented the commodity from reaching retail points efficiently and with attractive prices. Recently, organic coconut water has been exported abroad, but this market remains limited. Yet, according to Abreu,1 some European companies have been purchasing coconut water from the Northeastern state of Ceara´ to be either mixed with other beverages and/or rebottled. It is understood that the overall organic production is not sufficient to satisfy the growing American, European Union, and Canadian markets. Due to these characteristics of markets, entrepreneurship in the Plateau has changed over the years and the typical Plateau entrepreneur is no longer a local resident; he has interests in other sectors and a better education. The changes of the last decade in the Valle and the Plateau are closely related to strategies, activities, and the location of large fruit firms. These are firms that introduced new ways of organizing agriculture and characterized themselves for a more intense use of capital. These changes brought about not only the destruction of traditional systems of production and a redefinition of the use of the rural space, but also a reconfiguration of the regional labor market (Neiman, Bocco, & Martı´ n, 2001) and the establishment of new power relations. They also generated a growth in the population and in the consequent demand for services and social infrastructures (Steimbreger, 2004; Bendini, Radonich, & Steimbreger, 2005).

Recolonization of Space: The New Organization of Labor In the Valle and the Plateau the expansion of intensive agriculture during the 1990s caused a restructuring of the social relations of production, an increase in the value of land and a reconfiguration of regional labor markets. In both areas, expectations that changes in farm production would create new jobs existed. Yet, employment growth never materialized. The implementation of intensive agriculture led to profit increases for firms but did not translate into added employment. It transformed existing employment, though. In particular, the reorganization of the employment structure was one of the results of the implementation of new quality standards on the part of transnational retailers. It mandated the increase in the number of

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new labor tasks and the hiring of workers capable of performing them. These ‘‘multiple-task’’ workers were required to be available during the various phases of the production cycle and to perform varying jobs. Differently from the past, the multiple-task worker became highly valued. In the Valle, the agricultural labor structure is made up of a variety of positions. There is a small group of highly qualified professionals and technicians who have full-time, stable, and high salaried positions. There are also permanent, semiqualified wage workers who perform a multiplicity of labor tasks. Finally, there are temporary waged laborers who are less qualified with low wages and unstable employment. In this context, the predominant strategy of agricultural firms has been that of increasing labor flexibility by employing precarious labor as much as possible. The increase in the use of land for intensive production resulted in the increase of the use of temporary workers. Because ‘‘dead times’’ increased, firms adjusted to these new cycles by reducing the number of permanent workers. This restructuring also involved those in white-collar positions such as technicians and managers. As a result the power of unions and the effectiveness of their attempts to provide workers with contract-regulated full-time employment diminished. Currently, employment is characterized by short-term contracts, task-based informal jobs, multitasking, disregard for labor rights, and an overall increase of the precariousness and instability of employment. This situation makes past contractually based labor relations increasingly difficult to maintain (Tsakoumagkos & Bendini, 2000). As stated by Boris Maran˜o´n (2002), this is a typical neoclassic flexibility. ‘‘It is legitimate to produce more with the same and the same with less’’(Ardila Carrillo & Ulloa Unanue, 2002, p. 212). In the Valle, hiring of temporary workers takes a number of forms all carried out to take advantage of the weakness of labor. Labor cooperatives, ‘‘punteros,’’ and labor organizers intervene to allocate the seasonal labor force. These laborers are known as ‘‘golondrinas’’ workers. As stressed by Pedren˜o (2001, p. 165), firms organize true ‘‘labor recruiting networks that cover the entire country. These networks can either be formal, as in the case of employment agencies, or informal as networks based on friendship and neighbor ties.’’ In the case of the golondrinas workers, firms are required by law to inform workers of the availability of jobs at the outset of each harvesting and packaging period. This is part of the requirements associated with legislation regulating the hiring of ‘‘permanently seasonal’’ workers. A priority list of available workers is created, usually following seniority criteria, and workers are invited to apply for jobs according to their position

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on the list. However, since the call for jobs are published daily in local newspapers, golondrina workers may not have access to this information in their hometown. Consequently, firms inform them of the job availability through informal channels ‘‘privileging those who work more efficiently’’ (Bendini & Radonich, 1999). These channels include:  Labor leaders and organizers who operate in the workers’ hometowns. These are individuals who recruit laborers according to family, neighbor, or friendship ties. They also select workers on the basis of wage levels and social status desired by firms. This channel allows the control of migrant workers.  Contacts with municipalities and other institutions. In this case, the formal channels available through local bureaucracies are employed to recruit labor. For instance, with the Lı´nea Sur Rionegrina, jobs were listed through that province’s Labor Department. Similarly, in 2002, the Citros de Tucuma´n Labor Union was employed to recruit workers for the Valle.  Workers, family, and neighbor networks. Those who are already employed invite their relatives and friends to apply for jobs, vouching for them. This is a situation that pacifies labor relations by guaranteeing the commitment of workers through family and friendship ties. Under these conditions workers find extremely difficult to question and/or protest requirements and working conditions.  Labor cooperatives. When the demand for temporary jobs is high, large firms contact labor cooperatives. These are organizations that operate outside established labor laws and, in effect, are only ‘‘pseudo’’ labor cooperatives. ‘‘They represent one of the most extreme aspects of labor flexibility. They transform hired labor into ‘pseudo’ autonomous workers, ‘associates’ who receive low salaries, lack employment stability, fringe benefits, accident insurance, medical benefits, and the other benefits established by labor law’’ (Tsakoumagkos & Bendini, 2000, p. 103). In the Plateau formal jobs are prevalent and their prevalence affects the stability of local labor. Yet this stability is more the outcome of the fact that labor is recruited prioritizing those who reside locally than expertise per se. In effect, the qualification and specialization levels between formal and informal workers do not differ, and firms prefer local workers in order to use social networks as a tool of labor control. Simultaneously, the number of formal jobs remains low. This situation contributes to the existence of a reserve of qualified labor force that is willing to work at existing conditions. In this context, the relative weight of wage labor increased, while in absolute terms the number of workers employed decreased by 20 percent. This was the result

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of the state intervention through the implementation of the CODEVASF project. This project involved the expropriation of 96 farms and the redistribution of land to only 35 new operations. The concentration of farms that resulted diminished the relative weight of self-employed workers. As in the case of the Valle, family and neighbor ties are employed as mechanisms of labor recruitment and control. Relatives and friends vouch for workers to be employed. This situation ties the newly employed worker to the firm. Simultaneously, it further ties the recommending relative or friend to the company. These are employed workers who feel gratified by the fact that they could recommend someone and if this person performs well, their chances of keeping their jobs increase. However, the opposite is also possible. In the event that the recommended worker does not perform well, not only the recommending friend or relative is dishonored, but he/she may lose his/her own job. In their communities these individuals earn social credit that later will be cashed for favors in spheres that transcend work. For their employers, they are individuals who not only are knowledgeable of the functioning and social equilibrium of their communities, but also people who can be trusted. Their role of social mediators is fundamental for any business that offers temporary jobs. Another form of recruitment is through the recommendations of technicians and administrative personnel. In this case, technicians and administrative personnel recommend workers based on their past performances and location. Workers that live close to the fields are preferred to those who live elsewhere. This situation is due to the fact that firms usually transport workers to the fields. Accordingly, employing local people reduces transportation cost. These forms of recruitment of labor create economic advantages for firms while framing the actions of workers on cultural grounds. The obligations that the workers and the recruiters develop for each other tie them to the firm and to established behavior patterns. As they accept this type of employment, workers forfeit the possibility of maintaining antagonistic postures toward the firm. They, de facto, renounce the possibility of voicing opposition to firm’s decisions and practices. In effect, in those rare occasions when workers protest the firm’s action, he/she is not hired back. The result is that a diligent and controlled workforce is formed.

Intensification of Seasonal Migratory Processes Both in the Plateau and in the Valle, labor demand picks up during harvest. In the Plateau it is satisfied by employing returning local immigrants. The

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reason for the availability of these returning immigrants rests on the fact that the volume of jobs available is not high enough to attract workers from other areas. Only workers with local ties make themselves available. In the Valle, labor demand is satisfied through a flow of temporary migrant workers who arrive from various parts of Argentina. This group represents three-fourths of all wage laborers, that is, for one permanent worker there are three seasonal workers employed (Provincia de Rı´ o Negro, 1994). Because labor demand is disproportionally high during harvest, it creates shortages of labor supply during this period and an excess of labor availability for the rest of the year. Labor shortages are addressed through temporary immigration. In the Valle the majority of temporary workers come from the country Northwest (71%). This immigration flow is favored by the fact that the demand for seasonal workers in Northwest picks in different periods of the year. In the Northwest sugar and lemon plantations are typical and labor demand is at its highest in October, while in the Valle labor demand is at its highest in March. While Valle political authorities promote the employment of local workers, firms continue to use out-of-area workers stressing the limited local supply and its equally limited qualifications (Kloster & Steimbreger, 2001; Bendini et al., 2005). It is also important to stress that the majority of the golondrinas workers come from urban or suburban areas. Recently, these areas grew as a result of the gradual depopulation of rural areas, the higher availability of urban jobs, and the predominance of temporary employment in farming. The primary urban areas where large fruit firms are located, such as Chimpay, Belisle, and Lamarque, grew dramatically during the 1990s. These three urban areas grew 143.1, 108.3, and 40.6%, respectively, between 1991 and 2001. In both regions, the selective adoption of new technology engendered new requirements for labor. This was particularly the case among permanent workers. To address this novel situation in the Valle, firms developed training programs directed at intermediate-level technicians, foremen, and team leaders. This new labor demand required both manual and intellectual skills that transcended workers’ customary duties. It required the addition of new skills such as operating and repairing machinery and soil evaluation (Neiman & Quaranta, 2000). In the Plateau, the employment for professionals with a technical background has been inconsistent. And this is perhaps one of the reasons for the difficulties that the development of integrated fruit production has encountered in the area. The different tasks associated with production generated a significant segmentation and heterogeneity of the professional labor force.

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Limited in number, this group of qualified professional is characterized by occupational stability and high wages and entrusted with managerial tasks that include planning and administration. However, as new forms of work emerge they bring more responsibilities but offer less salary and benefits. Among the consequences of the development of fresh fruit production is the growth of female wage workers in the Valle and their almost nonexistence in the Plateau. In the Valle women are employed both in the production and packaging of commodities, and their labor has been particularly valued for tasks requiring advanced manual skills. These are jobs that require the careful manipulation of fresh commodities and/or sorting them for size, color, and shape. Women are assumed to be naturally endowed with these qualities. Therefore, what would be a learned skill is not recognized as such, but is viewed as an attribute naturally endowed to these workers, as also observed in the Brazilian San Francisco Valley (Cavalcanti, Ramos, & da Silva, 1998; Bendini, Cavalcanti, & Steimbreger, 2000; Cavalcanti & Bendini, 2001). Additionally, women’s formal education is not a predictor of employment as they learn key skills in the fields. It follows that informal knowledge acquired during the practice of everyday labor tasks and interaction with other workers is significantly more important than formal education (Cavalcanti & da Silva, 1999). As Lara put it: ‘‘higher educational qualifications are ignored’’ (Lara, 1998, p. 333). In the Plateau, female labor is viewed as most adequate for lighter activities. Because women are careful, detail oriented, diligent, and clean, their work is preferred for the pollination, plantation, and pruning of passion fruit. These patterns are similar to those recorded by researchers in the San Francisco Valley, where women’s skills are valued for viticulture. Despite this understanding, the participation of women in the labor structure is limited. They represent only 1.5% of all temporary workers in the area. Also, the use of female labor is limited by the subordinate position that women occupy in a patriarchal social system. Accordingly and as recorded by Bendini and Pescio (1998), the presence of women in intensive fruit production responds to families’ attempts to increase their overall incomes rather than gender emancipation. While fruit production is growing, wage levels remain low both in the Valle and the Plateau. In 2002 in the Valle, the wage of a packager was on average 300 pesos per month (about 300 US dollars at the time). Compensations vary with productivity as those workers who can produce more earn more. A good picker could receive an average of 500 pesos per month and this sum includes also a family check. The latter consists of a sum added to the worker’s monthly salary that is calculated in proportion to

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the number of children under 18 living with the family. During harvest, workers pick between 350 and 450 kg of fruit per day. During the postharvest period, workers are paid by the number of boxes packed per day. Wage workers are strictly controlled by foremen and ‘‘punteros’’ through the use of computerized programs. There are programs that record each picker’s personal data and his/her daily performance. Due to the more strict quality requirements existing in the export market, the volume of production has decreased in recent years. This situation has translated into lower workers’ income than in the past. In the Plateau, the vast majority of workers are paid the Brazilian minimum wage regardless of productivity. Contrary to the situation in the Valle, monitoring of workers’ daily output is carried out manually by supervisors. In the Valle, workers – and in particular golondrina workers – are often paid with company store vouchers, a situation that does not occur in the Plateau. As in many cases of the use of company store vouchers, firms not only reduce their need for cash, but also force workers to return their earnings directly to the firm in the form of purchases. In company stores, goods are sold at higher prices and the selection is limited. In the case of seasonal immigrants, company store vouchers prevent them from sending remittances to their families. Firms also gain by providing poor-quality dorms to workers. Given the limited availability of housing alternatives, workers do not have other options but to accept firm’s housing. While seasonal migrating workers have historically been a weak and vulnerable segment of the labor structure in agriculture, the changes that occurred recently increased these workers’ precariousness and vulnerability. The implementation of large-scale global agriculture caused a further isolation of workers, weakened solidarities and labor organizations, and increased labor exploitation. Miguel Murmis captures the overall conditions of labor in the Valle by stating that ‘‘precariousness becomes the norm as illegal working conditions constitute the actual legality’’ (Murmis, 1994).

CONCLUSIONS As capital colonized new spaces and recolonized existing ones, it has engendered a number of consequences that have affected transnational corporations, and local firms and workers. In this regard, the analysis presented in this chapter allows us to reach the following conclusions. 1. Though the Valle and the Plateau are distant areas with different sociohistorical contexts, they are the terrains of common processes. One

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2.

3.

4.

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of these refers to the role of the state. The state has been a fundamental actor in the development of intensive agriculture in both regions. While in the Valle its action favored the opening of markets, in the Plateau state action was inspired by a Fordist posture whereby intervention and planning shaped the socioeconomic evolution of the area. Despite processes of integration in fresh fruit networks are present in both regions, the degrees and scope of global integration vary significantly. The Valle is highly integrated into global fresh fruit circuits. The Plateau remains an area that produces for the domestic market despite attempts to commercialize production at the international level. The labor structure remains weak and characterized by the presence of seasonal workers who receive low pays and are controlled by systems that transcend the labor market per se. These are systems based on family, neighborhood, and friendship ties resulting in the further exploitation of labor. Contrary to original expectations, the agricultural labor market remained in depression. The overall number of jobs available decreased along the quality of employment. This is a situation that continued despite the expansion of market and the growth of firms’ profitability. Contrary to established expectation, the expansion of the industry did not translate into better working and living conditions for workers. While some segments of the labor structure in both areas enjoy higher economic compensation and employment stability, they face new and more complex work-related tasks. Technical and managerial personnel are now asked to perform more sophisticated and complex functions than those in the past.

NOTE 1. Abreu, Antonio Pinto (personal communication, 2007). For this researcher, the product has great potentials and technology to conserve it is already available.

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Bendini, M. (1999). Entre Mac- a˜s e Peˆras: Globalizac- a˜o, Competitividade e Trabalho. In: J. S. B. Cavalcanti, M. Bendini, & J. Graziano da Silva (Eds), Globalizac- a˜o, Trabalho, Meio Ambiente (pp. 97–121). Recife: Editora Universita´ria UFPE. Bendini, M., Cavalcanti, J. S. B., & Steimbreger, N. (2000). Cambios en la Estructura Productiva e Grupos Vulnerables: Migrantes e Mujeres en Regiones Frutı´ colas de Exportacio´n: Alto Valle de Argentina e Vale de Sao Francisco en Brazil. Proyecto CONICET-CNPq. UFPE (Brazil) and UNCo (Argentina) manuscript. Bendini, M., & Pescio, C. (1998). Mujer e Trabajo: las Empacadoras de Fruta del Alto Valle. In: M. Bendini & N. Bonaccorsi (Eds), Con las Puras Manos, Mujer e Trabajo en Regiones Frutı´colas de Exportacio´n (pp. 15–50). Buenos Aires: Cuadernos del GESA I. Editorial la Colmena. Bendini,, M., & Radonich, M. (1999). De Golondrinas e Otros Migrantes. Buenos Aires: Cuadernos del GESA II. Editorial la Colmena. Bendini, M., Radonich, M. & Steimbreger, N. (2005). Estudio territorial de Luis Beltra´n. Available at http://www.rimisp.org.ar Bonanno, A. (1998). Liberal democracy in the global era: Implications for the agro-food sector. Agriculture and Human Values, 15(3), 223–242. Bonanno, A. (1999). A Globalizac- a˜o da Economia e da Sociedade: Fordismo e Po´s-Fordismo no Setor Agroalimentar. In: J. S. B. Cavalcanti, M. Bendini, & J. Graziano da Silva (Eds), Globalizac- a˜o, Trabalho, Meio Ambiente (pp. 47–96). Recife: Editora Universita´ria UFPE. Casanova, M. L. (1979). Ioioˆ Pequeno da Va´rzea Nova. Sa˜o Paulo: Editora Clube do Livro. Cavalcanti, J. S. B. (1999). Globalizac- a˜o e processos sociais na fruticultura de exportac- a˜o do Vale do Sa˜o Francisco. In: J. S. B. Cavalcanti, M. Bendini, & J. Graziano da Silva (Eds), Globalizac- a˜o, Trabalho, Meio Ambiente, Mudanc- as Socioeconoˆmicas em Regio˜es Frutı´colas para Exportac- a˜o (pp. 123–170). Recife: Editora Universita´ria UFPE. Cavalcanti, J. S. B. (2006). The dynamics of local development, from hunger to quality food: Cases from Northeastern Brazil. In: T. Marsden & J. Murdoch (Eds), Between the local and the global: Confronting complexity in the contemporary agrifood sector (Vol. 12, pp. 181–208). London: Elsevier Research in Rural Sociology and Development. Cavalcanti, J. S. B., & Bendini, M. I. (2001). Hacia una Configuracio´n de Trabajadores Rurales en la Fruticultura de Exportacio´n en Brazil y Argentina. In: N. Giarraca (Ed.), Una nueva ruralidad en America Latina? Buenos Aires: CLACSO/ASDI. Cavalcanti, J. S. B., da Mota, D. M., & da Silva, P. G. (2002). Mirando Hacia al Norte, Clase Ge´nero y Etnicidad en los Espacios de Fruticultura del Nordeste de Brazil. AREAS, 22, 161–181. Cavalcanti, J. S. B., Ramos, J. V. R., & da Silva, A. C. B. (1998). El Trabajo Femenino en la Agricultura de Exportacio´n, Las Trabajadoras en la Produccio´n de uva- Brazil. In: M. Bendini & N. Bonaccorsi (Eds), Con las Puras Manos (pp. 77–94). Buenos Aires: Editorial la Colmena. Cavalcanti, J. S. B., & da Silva, A. C. B. (1999). Estrate´gias Produtivas de Homens e Mulheres na Fruticultura de Exportac- a˜o: o Caso do Vale do Sa˜o Francisco. In: J. S. B. Cavalcanti, M. Bendini, & J. Graziano da Silva (Eds), Globalizac- a˜o, Trabalho, Meio Ambiente (pp. 259–281). Recife: Editora Universita´ria UFPE.

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Kloster, E., & Steimbreger, N. (2001). Empresas e Territorio, Impacto en el Trabajo Agrario a Partir de un Estudio de Caso. In: 51 Congreso Nacional de Estudios del Trabajo (pp. 1–21). Buenos Aires: ASET, Universidad de Buenos Aires. Lara, S. (1998). Nuevas Experiencias Productivas e Nuevas Formas de Organizacio´n Flexible del Trabajo en la Agricultura Mexicana. Me´xico: Juan Pablos Editor. Lara, S., & de Grammont, H. C. (1999). Reestructuracio´n Productiva e Mercado de Trabajo Rural en las Empresas Hortı´ colas. In: H. C. de Grammont (Ed.), Empresas, Reestructuracio´n Productiva e Empleo en la Agricultura Mexicana (pp. 23–69). Me´xico: Plaza e Valde´s Editores. Maran˜o´n, B. (2002). Impactos Socioecono´micos e Ambientales de la Modernizacio´n Agroexportadora no Tradicional en El Bajı´ o, Me´xico. Revista de Ciencias Sociales Areas, 22, 183–204. Mota, D. M. da (2005). Trabalho e Sociabilidade em Espac- os Rurais. Fortaleza, Brazil: Embrapa, Banco do Nordeste. Murmis, M. (1994). Algunos Temas para la Discusio´n en Sociologı´ a Rural Latinoamericana, Reestructuracio´n, Desestructuracio´n e Problemas de Incluidos e Excluidos. Revista Latinoamericana de Sociologı´a Rural, 2, 5–28. Neiman, G., Bocco, A., & Martı´ n, C. (2001). Tradicional e Moderno, Una Aproximacio´n a los Cambios Cuantitativos e Cualitativos de la Demanda de Mano de Obra en el Cultivo de Vid. In: G. Neiman (Ed.), Trabajo de Campo, Produccio´n, Tecnologı´a e Empleo en el Medio Rural (pp. 174–200). Buenos Aires: Ediciones Ciccus. Neiman, G., & Quaranta, G. (2000). Reestructuracio´n de la Produccio´n e Flexibilidad Funcional del Trabajo Agrı´ cola en la Argentina. In: Estudios del Trabajo. Reestructuracio´n e Trabajo en la Produccio´n Agroalimentaria. Buenos Aires: ALAST 6(12). Pedren˜o, A. (2001). Efectos Territoriales de la Globalizacio´n: el Caso de la Ruralidad Agroindustrial Murciana. Revista de Estudios Regionales, 59, 2a E´poca, Enero-abril: 69–96. Pedren˜o, A. (2003). Los Campos de la Globalizacio´n Agroalimentaria. In: M. Bendini & N. Steimbreger (Eds), Territorios e Organizacio´n Social de la Agricultura. Cuadernos GESA 4. Buenos Aires: Editorial la Colmena. Provincia de Rı´ o Negro. (1994). Censar’93. Ministerio de Economı´ a, Subsecretarı´ a de Fruticultura, Rı´ o Negro. Polanyi, K. (1992). The economy as instituted process. In: M. Granovetter & R. Swedberg (Eds), The sociology of economic life. Boulder, MA: Westview Press. Sabourin, E., Caron, P., & Tonneau, J. (2005). Dinaˆmicas Territoriais e Trajeto´rias de Desenvolvimento Local: Reflexo˜es a Partir de Experieˆncias no Nordeste Brasileiro. Revista Raı´zes, 24(1), 23–31. Steimbreger, N. (2004). Trayectoria e Reorganizacio´n de una Empresa Frutı´ cola en el Marco de la Reestructuracio´n Productiva. Tesis de Maestrı´a en Sociologı´a de la Agricultura Latinoamericana. Neuque´n, Argentina: FDyCS, Universidad Nacional del Comahue. Steimbreger, N., Radonich, M., & Bendini, M. (2003). Expansiones de Frontera Agrı´ cola e Transformaciones Territoriales: Procesos Sociales Diferenciales. In: M. Bendini & N. Steimbreger (Eds), Territorios e Organizacio´n Social de la Agricultura. Buenos Aires: Cuadernos GESA 4. Editorial La Colmena.

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Teubal, M. (1999). Complejos e Sistemas Agroalimentarios, Aspectos Teo´rico-Metodolo´gicos. In: N. Giarracca (Ed.), Estudios Rurales, Teorı´as, Problemas e Estrategias Metodolo´gicas (pp. 97–121). Buenos Aires: Editorial La Colmena. Tsakoumagkos, P., & Bendini, M. (2000). Modernizacio´n Agroindustrial e Mercado de Trabajo, ¿Flexibilizacio´n o Precarizacio´n? El Caso de la Fruticultura en la Cuenca del Rı´ o Negro. Revista Latinoamericana de Estudios del Trabajo, 6(12), 89–112.

CHAPTER 3 LABOR MOBILITY IN THE FIELD OF AGRICULTURE AND FOOD GLOBALIZATION Gustavo Henrique de Souza Dias and Josefa Salete Barbosa Cavalcanti ABSTRACT The objective of this chapter is to illustrate how globalization affects labor mobility and work. The impact of globalization ranges from a profound restructuring of productive agriculture and rural labor markets to the forms through which production and labor are controlled – including the internal and external systems of food quality and safety standardization. These aspects require a broad readaptation and modernization of food distribution models and the standardization of technical principles. In the sector of local food distribution, these changes have significantly affected the lives of those involved, especially in terms of increased competitiveness and the escalation of the demands associated with the enhancement of the quality of products. Moreover, accelerated technological innovations, such as information technology, have facilitated the compression of time and space and shaped forms of social resistance. In this scenario, the reduction of logistic costs in the production and distribution of commodities has become one of the fundamental conditions for the Globalization and the Time–Space Reorganization: Capital Mobility in Agriculture and Food in the Americans Research in Rural Sociology and Development, Volume 17, 83–106 Copyright r 2011 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1057-1922/doi:10.1108/S1057-1922(2011)0000017006

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viability of large companies. This is more the case for industries that deal with highly perishable produce such as fresh food. Through an analysis of the perspectives of workers in the refrigerated cargo industry, the chapter illustrates the pressure that fall upon the individual routine of those involved in this field and the ensuing changes in this sector’s operating standards. The study was conducted in the city of Recife, in the northeastern portion of Brazil.

INTRODUCTION One of the most discussed aspects of globalization is the creation of global networks of production and consumption and the market integration required. Speaking from a variety of points of views, scholars have often approached the analysis of this integration by stressing both the homogeneity and heterogeneity that it created in terms of quality of life, the organization of labor, and in the new links among the supranational, national, local, public, and private spheres. While some recent contributions (Bonanno, 2007; Harvey, 2005) directly place market integration and global sourcing in the context of compression of time and space, the extent to which these transformations influence present society and agricultural productive systems remains an issue of intense debate (Wanderley, 2000; Bendini, Cavalcanti, & Flores, 2006; McMichael, 1994; Schaeffer, 1997; Busch, 2000; Cavalcanti, 2006). Studies regarding the globalization of agrifood systems (Marsden, 1998; Jansen & Vellema, 2004; Belik, 2005) have highlighted a transition in the hierarchical structure of capital and the market, where the guiding axis moves from production to distribution. As the coordinating power of agrifood chains intensifies, the construction of the value of food commodities increasingly incorporates a series of services concentrated on the continuous flow of demand. Accordingly, the social actors located in the productive phase lose importance as compared to those located in the processing, market planning, and marketing (Jansen & Vellema, 2004, p. 5). One of the consequences for the production sector that feeds the sense of this transformation is that while we observe a growing interest concerning this sector in operations of market analysis, prospects for new niches, and changes in consumer habits (Jansen & Vellema, 2004, p. 5), the returns on agricultural inputs have been continuously decreasing. This fact can be tied to a number of causes, especially those related to the constant growth of

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safety parameters in the nontariff barriers of international food markets, as well as the growth in demands for specific quality products such as organics. Such guidelines are historically created, partly due to consumer and environmental movements and partly because of more recent manifestations, such as fair trade organizations. The essence of the debate surrounding the quality of the commodities that circulate in the systems where food and rurality are built is highlighted by Friedland (1994), Cavalcanti (1999a, 1999b), and Renard (2003). In this manner, the unbalance of power among the production, distribution, and retailing sectors is demonstrated with sociological theory as being felt in different gradations and levels. This surpasses the strict domain of the economic sphere, revealing the relationship between retail corporations and English food safety government agencies (Marsden, 1998, p. 4). As recently pointed out (Friedland, 1994; McMichael, 1994; Marsden, 1998; Lara, 1998; Bonanno, 2001; Renard, 2003; Jansen & Vellema, 2004; Flexor, 2005; Belik, 2005), this twist in governance relations, using the term coined for studies that focus on the concept of global commodity chains, occur in direct proportion to the proximity that each subject involved in the chain maintains with its end (the consumer) and the higher or lower possibility of handling and adapting to the instruments of food quality control (Gibbon, 2001; Bair, 2005; Gibbon & Ponte, 2005).

METHODOLOGICAL PERSPECTIVES Capital is capable of moving and colonizing new spaces. Under this premise, Bonanno (2007) raises significant issues surrounding the pace of work and capital mobility in the global era. According to the author, with globalization, time and space were not only compressed but reorganized contrary to Fordism, when transformations in time and space relationships were centered in the nation-states. Such reorganization altered key phenomenon parameters, including mobility. Still, according to Bonanno, globalization produce a reconfiguration of the mobility of financial and productive capital that go up against institutions, practices, ideologies, and political expectations that are supported by past dimensions of time–space relationships. Such a fact has generated contradictions that emerge from this situation and deserve to be understood. New capital mobility depends on a global capitalist class, which must face contradictions in the levels of accumulation and mobility. That class is usually well organized, according to its interests.

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Productive capital moves at a slower pace; such speed is qualitatively different in terms of time–space acceleration and the concomitant reorganization of the social relations provoked by globalization. This reorganization of time and space also promotes confrontations between dominant and subordinate classes, imposing a continuous reformulation of its action scope. It is the speed at which commodities are produced and sold that defines the possibility of profit generation. Advances in technology, uses of labor, and transportation of goods, among other factors, contribute to the reorganization of the time that is necessary for capital circulation. Capital mobility and concomitant time–space compression promote a reorganization of social relationships. Under globalization, nation-states’ frame of action is undergoing a crisis because the social conditions that shaped it have been modified, while production is largely decentralized and organized into networks based on practices of global provision. Such practices have changed the social-political settings of workers’ daily lives as they begin to move to the beat of a new relationship between capital, state, and work. This chapter draws on research carried out on transformations pertaining to agrifood systems. In previous works (Marsden & Cavalcanti, 2001; Cavalcanti, 2004, 2006; Cavalcanti et al., 2005), issues were addressed concerning how these changes, aimed at exports for the global markets, operated in various regions. More specifically, Dias (2003, 2006) calls attention to changes in transportation, inspired by previous knowledge regarding the service of refrigerated transportation. The expansion of this research from a central case study to the amplification of interviews with informants, along with the inclusion of other key professionals in the studied field, was also of great help for this project’s final result. The methodological strategies used enabled us to thoroughly understand the particular expressions of this process through case studies in which key informants were interviewed. Moreover, direct field observation gave extensive data regarding how subjects live through changes in their professional field day by day.1 Secondary data and direct observation techniques enabled us to examine and analyze how rules and conventions defined for the production and circulation of commodities are strongly influencing production and distribution spaces. These rules contribute to changes in products, workplaces, and qualifications required from managers and others who work in the areas of production, distribution, and consumption of food. Evidence suggests that quality parameters instructed by external agents involve the food, the workers, and the environment in a

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peculiar group of social relations that disclose changes in production, distribution timing, and the final consumption of agricultural products. The narrowing of the links established between consumer markets of the north and productive regions in the south in the last 20 years has brought about a set of changes in the nations’ agrifood systems. Such changes translated into impacts that range from an extensive restructuring of the agricultural productive sector, rural labor market, and internal and external regulation of quality control and food safety system, to the ample readaptation and modernization of food distribution models with the universalization of technical principles such as traceability, just-in-time production, and cross-docking. In the sector of local food distribution it is possible to observe how such changes affect the lives of the social actors involved in the professional network in this area. The changes occurring in this locus are derived from a strong increase in competitiveness and pressure over the quality of the goods. The constant flow of technological innovations in various areas, where information technology stands out, supplied the basis on which these changes take place. In this scenario, the reduction of logistic costs implied in the production and distribution of goods becomes a fundamental condition for the survival of large corporations that are pushed toward the direction of a new global modernization model, which becomes more incisive for corporations that deal with highly perishable goods such as fresh food. Analyzing the perspective of professionals in the area of transportation of refrigerated cargo, it is possible to observe the pressure that falls upon these social actors’ individual routines with the changes in their operating standards.2 This is how what could have been, in other circumstances, defined as a sector apart from agriculture is incorporated into a network of connected subjects that equally affect sociability and the kinds of control exerted over workers (Mota, 2005). The results highlight changes in flexibility processes, quality control, certification of origin, and even the kinds of resistance common to the daily lives of workers and corporations included in the globalization of agrifood systems, which contribute to highlighting the relevance of the processes involved from the field to the table.

The Fresh Fruit and Vegetable Market: Quality as a Domination Mechanism The adaptation to the changes and expansion of new diets along with the proliferation of new products is made possible due to advances

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in refrigerated technologies of storage and transport. Friedland (1994, p. 218) states that there is a global articulation of agrifood systems that connects countries and productive southern regions to the wealthy international consumer markets of northern countries. In this context, it is understood that the fresh fruit and vegetable (FFV) commerce, as a market of products with a specific quality. Since this is a productive sector that faces market variables as well as uncertainties inherent to natural elements on which production conditions are supported, the fresh produce market is characterized as a high-risk investment (Lara, 1998). This context supports the vigorous marketing matrix that forms the FFV market, involving the differentials that these products need to incorporate in view of international competitors as a way of breaking into the markets. The recent proliferation of individual certifications reveals the process through which large retail corporations stand out in the development of technical parameters of quality and sanitary safety (Marsden, 1998), as well as in the assimilation of risks and preferences for new consumer habits (Belik, Santos, & Green, 2001). The pressure over the aggregation of value to agrifood occurs through this new coordinating structure that is led by multinational supermarket chains. This occurs because of the construction and improvement of sanitary parameters that control production, distribution, and commercialization processes, with the incorporation of new technologies throughout the whole chain, with special attention to the restructuring of the distribution system (Green & Schaller, 2000; Lavalle, 2004a, 2004b). In this conjuncture, large agents of the wholesale industry become major coordinating links in the fresh foods chain (Friedland, 1994; McMichael, 1994; Marsden, 1998; Lara, 1998; Bonanno, 2001; Renard, 2003; Jansen & Vellema, 2004; Flexor, 2005; Belik, 2005). Changes in the classic contract format typical of the food supply through retail supply stations occur in the conjuncture of the so-called ‘‘process of logistic systems rationalization’’ (Green & Schaller, 2000, p. 127). The modern international agribusiness sector, through technological innovation and labor control strategies puts pressure on the organization of logistic functions according to the growing need to reduce productive costs (McMichael, 1994; Raynolds, 1994; Cavalcanti, 1997, 1999; Lara, 1998; Cavalcanti & Marsden, 2001). However, the commercialization of food through transnational retail corporations promotes a withdrawal of logistic functions usually performed in order to specialize in management and quality control of its products.

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Changes in the Paradigm of Food Distribution, the Transport Sector: Logistic Restructuring and Social Demands The research on which this chapter is based arose from the observation of processes established in the market of transportation of refrigerated cargo for food distribution in the metropolitan area of Recife, Pernambuco. The service industry referred to in this work, the transport of refrigerated cargo, was one of the first to undergo the extensive process of outsourcing used by the main retail organizations in the city (Dias, 2003). Lara (1998, p. 87) discusses such a phenomenon as a characteristic of present economical processes in agrifood systems, pointing out that productive restructuring leads to key transformations in these systems involving a higher differentiation of products, guidance for market niches, assimilation of new technologies, new forms of control and labor organization, as well as decentralization and flexibility of coordinating structures of multinational corporations. An example of this phenomenon is the broad use of service outsourcing by leading companies in the distribution sector, which basically consisted of the substantial reduction of internal staff and a reduction in costs with labor charges in different levels in the organization (transportation, loading goods into the trucks, storage, cleaning and maintenance, among others). According to such practices, supermarket chains gradually began to get rid of their own fleet of vehicles while at the same time transportation companies surged, bringing the opportunity to compete for delivery routes to multiple sales points in the region. As common practice, the transport companies that emerged in this context acquired many trucks from old fleets that belonged to large distributors. According to our informants, the maintenance conservation of these vehicles was generally very poor.3 This is understandable, since a transport company has its gross capital fundamentally represented in its fleet, which constitutes its main assets, corresponding to at least 90% of the investment applied in the institution of the company (Dias, 2003). Thus, while the outsource of transportation services was in some cases a technical improvement, other stages of the logistic circuit were found to be in a critical situation resulting in complications for the independent contractors in this system (Dias, 2003, pp. 34–38). As described by Green and Schaller (2000), the core of the rationalization process of logistic was persecuted in the retail sector in view of specialization in the quality control offered, as opposed to what occurs in the productive sector where the optimization principle was strengthened. In spite of the

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segmentation and expansion of the specific food market and the optimization of the quality control system for the commodities, there was a multiplication of the problems and conflicts established among the different social actors involved in the production process of the value assigned to the food in the distribution stage. Lavalle (2004a) describes how the economic conjuncture influences the execution of the supply contract in the large national retail sector in Brazil. We maintain that, in the conjuncture of high sales and thus of productivity in the national supermarket sector, the main retail corporations in Brazilian capital cities began to demand an increase in the intrinsic quality of the products supplied to the networks (Lavalle, 2004a, p. 3). In a crisis situation in the sales expansion movement, the sector began to raise the price charged for the shipment of products to the detriment of the differential imbedded in the quality or sophistication of the commodity itself as the most important factor. However, in both occasions, the optimization of logistic services of physical distribution was still seen as a growing element demanded by retail agents (Lavalle, 2004a, p. 5). The guarantee of a dexterous, regular, and technologically supported provision became essential in the supply chain according to this tendency in the national scope. The physical logistic of the distribution sector became a terminal factor in the process of purchase decisions for mega-retail corporations, and was used as a competition weapon of growing relevance in differentiation initiatives for competitors, according to Lavalle (2004a, p. 1). Gibbon and Ponte (2005) state that the domain of the process of building quality parameters restates the control that economic agents in the distribution sector have upon global value chains. The FFV case is inserted in this process with an additional complication, the high perishability of products, which presents extra difficulties when considering management and costs of the logistic involved. As stated by Lavalle, despite the process of specialization of logistic functions (with the emergence of specialized firms and more competent and autonomous intrafirm sectors), the level of dissatisfaction with this service sector expressed by commerce has only grown in Brazil. This can be seen as an outcome of the intensification of the search for more competitive and specialized companies in the various technical functions, and therefore the growing and meticulous demand for the fulfillment of requirements that are defined by large distributing corporations. Returning to the case of the refrigerated transportation sector in Recife, the new social actors who emerged in the space for rendering services created by supermarket corporations had to rapidly adapt to a

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context of growing pressure for the optimization of this service and adaptation to modern technical operation concepts, such as just-in-time production, cross-docking, and ultra flexibility of the journey, which caused a direct impact on the profile of professionals in this line of work, especially the drivers, as will be seen subsequently. It is pertinent to bring up observations concerning the notion of upgrading surrounding such global networks. The term corresponds to the mechanisms through which agents in productive networks or ‘‘chains’’ achieve higher profits through an actual improvement of their competitive positioning in a given chain of product where they operate. In accordance, Gibbon (2001) and Bair (2005) supported the revision of real profit between the lines of these processes. The pressure over the regularity of fresh food supply with quality levels rigorously controlled in the present retail sector peaks with changes in the operation standards of food supply, undertaken by the supermarket agent. The new operation standard supports itself on the logistic platforms system that concentrates the stock of goods to be distributed in few geographically strategic places. The social impacts of these ample changes are many and specific for the new functions created in the logistic circuit of the sector. Besides the pressure for adaptation and operational optimization, the new social arena generated has its own inequalities that affect each of the social actors involved in this network and the way these professionals’ profiles are built to meet these obstacles. This fact is clarified by the following statement, exposing one of the social dilemmas faced by the social actors inserted in the new service market. Competitiveness in the sector is y I’d say it’s predatory. Many times the guy has another job, buys one, two, three trucks and throws himself into the market, so this is terrible for us. Because this isn’t always a registered company that act in accordance with labor rights. (Informant, president of trucking company X.)4

This ample transformation of the food distribution process paradigm in the local retail market brought conflicting aspects concerning the dynamics of the new relationships established between the different social actors in the sector (Dias, 2003, 2006). To more accurately understand the meaning of these structural changes in the food distribution manner and the impact produced in the lives of the social actors directly connected to the FFV network, it is necessary to bring to light a number of aspects from the social environment from which these processes emerge. The effort is then, following a substantive perspective of economical phenomena as proposed by Polanyi (1992), to contextualize the universe of

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social dispositions in the plot of individual interactions in which these relationships are established. Equally, Bourdieu (2005) proposes the construction of a realistic definition of economic rationality that needs to be viewed as an encounter of socially constructed dispositions. According to this, the importance of deconstructing concepts concerning the nature of the actions of economic agents in a specific commercial sector is highlighted (Bourdieu, 2005, p. 23). The economic field is a socially constructed space constituted through the presence of concrete social agents; their expectations, actions and reactions, and the nature of the relationships are formed in this environment. The economic agents, before taking actions motivated by an immediate impulse to changes in the market system, adapt to the configuration of the structure and react to it in the sense of existing relationships of power and with the particular tools with which they entered the field or with the ones they conquer. The tensions and conflict that characterize this field influence and determine the actions of the agents involved. Only then the agents can finally assume an objective position, resorting to the available resources. The context of specialization of functions and the appearance of independent contractors in the transportation of refrigerated products for supermarket corporations in Recife supplied useful examples for the observation of these phenomena. In their contact with shipper clients, especially supermarket chains, independent contractors in transportation shape their actions and practices according to the atmosphere of daily negotiations with the employees that represent these large corporations in the domain of individual interactions. The profile of the professional driver employed in a company of transportation of refrigerated products is drawn in this context.

Changes in the Labor Routine in the Food Transportation Sector The profile of the professional driver in this sector was constructed through a case study of the staff of an average-sized trucking company, as mentioned in the methodology. Most of these professionals were married, aged 21–48, with different educational backgrounds, from first years of primary school to high-school graduates. Most of them had five years experience on average in the transportation sector, and had various other jobs such as waiters, night guards, and doormen in buildings and residential areas. The job of an employee in a transportation company includes knowing each stage of his job and having a more general understanding of the logistic

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area. These demands aim at preparing the professional to be able to trace flaws in the logistic sector. A manager in such a firm has to be in a position to correct the flaws and protect themselves from the cost overruns by correctly attributing responsibilities in daily negotiations with employees in charge and contractors. More than that, it is indispensable for the employee to know about the mechanics of his work instruments: the truck, how the cold-storage equipment works, and the conditions for preservation of the quality of different products. This includes handling and adjustments of the different temperatures in which each cargo should be transported, the ideal way to organize the trunk5 in order to optimize and facilitate the unloading process without compromising the integrity of the product, since many refrigerated goods are fragile and will be damaged through excessive piling. Besides having a certain domain regarding the technical aspect of the transportation service, the employee also has to deal with paperwork. During his shift, the professional organizes invoices and other documents pertaining to the content, origin, and destination of the product they are transporting, among other duties related to receiving and delivering the cargo. The job very often explicitly requires a significant amount of information about how tasks should be performed, surpassing what a superficial observation would inform regarding the job as simply driving the truck, as the following statement from one of the professionals interviewed explains: Accommodation of the cargo, type of cargo, estimated time for delivery of the cargo, all this y the driver has to know about y temperature y I have to know the cargo I’m transporting, don’t I? (Driver of trucking company X, age 48.)4

Although there are numerous demands regarding professional qualifications, the labor market in Recife still offers poorly qualified workmanship and the scenario is aggravated when one has to attend to the demands determined by the sector. Few candidates (with the available workmanship) are qualified to deal with company paperwork that requires a minimum level of literacy. The difficulty grows when there is a demand for qualifications to successfully repair mechanical components of the trucks, although this specialization is mainly acquired with experience in the job. This is another aspect that eliminates a great number of prospective candidates who wish to enter into the market. The candidate for a position in a trucking company also needs to understand the use and functions of the cold-storage equipment when instructed to. Sometimes some people come here and they have no contact with refrigerated cargo, they don’t even know what a refrigerated truck is and we have to teach them, show them how it works, how to plug it in y there are some secrets to the job. You don’t simply

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Age is another relevant issue when hiring professionals, since the job is considered exhausting by the interviewed informants. The trucking company works 24 hours, 7 days a week, and requires that its employees be available at any given time to solve problems such as trucks that break down in the middle of their itinerary, requests for emergency services, or other possible unexpected situations that are customary in this field. Employees have to work overnight and many times they are also responsible for unloading their trucks. There are also frequent problems on the highways. These many challenges demand skill and physical stamina from the transportation professional. In addition to the required qualifications of the transportation professional, due to all the obstacles interposed for an efficient performance, one of the most important factors for the efficient functioning of a transport company is the recruitment of employees who are capable of dealing with obstacles and finding efficient solutions without creating conflicts with employees from the contracting company, thus preserving the relationship between the trucking company and the contractor, in order to avoid financial loss and to complete the assignment satisfactorily. Due to all the reasons stated above, an experienced professional who performs the required quality work is well valued in the logistic sector in this market and has, usually, stable job in large corporations in this sector; those with an ideal professional profile are rarely available in the regional market.6 The example of refrigerated transportation services in Recife clarifies the ways in which the organizational structure of such new companies are created. They work under the same overwhelming pressure that independent contractors in this market are subjected to, regarding the local representatives of global commodity chains, the supermarkets. Regarding the situation of those who work in the sector, the Sindicato dos Rodovia´rios de Pernambuco (labor union of the Pernambuco highway network) detects major obstacles faced by this category. Regarding the level of autonomy of legislation due to the lack of a centralizing institution, there are significant variations in tariff and normative policy. In addition, the high rate of hazards on national highways offers all kind of risks from accidents due to precarious fleet to smuggling of cargo. Mixed with these issues are those professional drivers on national and international highways always putting their lives at risk to some extent, according to their sector and the

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organization of the service rendered. Exposed to accidents and crimes on the routes they drive through day by day, the drivers are always aware of being inclined to be victimized by the risk factors of their jobs.

Transportation Service in the Context of Globalization of Agrifood Systems: Quality and Instruments for the Control of Labor In the field of dry cargo7 transportation, the job of a driver requires that he be focused on the elementary performance of his routes. Among the tasks of adapting to the established local and regional arrangements, the adaptation of the sector to handling a high-value cargo such as the FFV imposes special elements for the understanding of the transformation of labor conditions in this field. Regarding the transportation of hortifruit, fresh vegetables and fruits: It is totally different from a dry cargo truck. When you’re transporting perishable cargo, the name already tells you that you have to have special care y it’s easier for the cargo to be damaged y you can’t put extra weight on top of it, you can’t step on the packaging and you have to keep the ideal temperature for each product. (Informant, president of trucking company X.)8

Regarding the specificities of quality parameters that surround the object around which the service revolves, the higher the employees’ knowledge regarding the technical elements that pertain to their individual function, the higher the company’s efficiency in performing its service. In the execution of his service, the professional in cargo transportation sees a condensed version of his particular logistic stage. The fundamental element for this service is the food as a commodity, an object that incorporates value throughout its course. If the delivery is not made to the previously determined place and time, the service fails. Any obstacle that occurs at any stage while the service is being carried out results in its negative conclusion. It is vital for trucking companies to increase their bargaining power when negotiating contracts; this is where better proficiency from the drivers can be required. These claims are only made possible if the company understands their field of work. However, it is important for the company to make it possible for its employees to perform their jobs satisfactorily. As seen before, these professionals depend on the use of the tacit knowledge they produce, molding operation procedures as the service is carried out. The operational

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procedures of refrigerated transportation are the result of the tacit knowledge gained through everyday experience. It is during this transformation of explicit know-how that relevant information is produced regarding the content of the transportation service itself. In a trucking company, the vehicle and the highway are the factory. Without the experience that enables employees to surpass obstacles that arise, the service is intensively harmed or made impossible. Busch (2000, p. 276) states that norms and standards are phenomena that occur within a negotiation process between individual social actors. Under the pressure of coming to an agreement, individual social actors live, day by day, a reality susceptible to renegotiation, the universe of practical reality (Busch, 2000, p. 276). The establishment of tests to certify the quality of modern goods configures a relationship of power among the social actors who are involved in its application. Tests create, maintain, and transform the product allowing it to monitor, control, and organize the behavior of each social actor in a productive subsector (Busch & Tanaka, 1996, p. 23).

Quality and Mobility: Political Agenda, Commercial Strategies, and Labor Changes in the FFV Sector Bonanno (2007, p. 14) raises a debate about how multinational capital counts on the potentialities created by present political–economic institutions that break off with the limitations and inflexibilities of the Fordist nation-state breaking ‘‘barriers ideologies, opposing policies, constructing resistance and civil mobilization.’’ In this context, the scenario is favorable to the reunion of material and human conditions of the time and space categories that contribute to the unprecedented acceleration of the capital circulation period. The literary debate surrounding the tendencies traversed by agrifood systems until now leads us to indications that emphasize what has been observed in local experiences. Bonanno (2001) states that with the new scenario of international relations and regulatory obstacles in which the nation-states are imposed under post-Fordist arrangements, critical consumers and new social movements are the best-positioned social actors to perform emancipating actions in present time. In this scenario, the debate surrounding recent scandals involving food production raises central issues due to the visibility that such events have with public opinion and consumer movements of the north. These problems become efficiently registered by a number of

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regulatory mechanisms engendered by technical and political advances mainly brought up by mega supermarket corporations, which is why these corporations take on, along with public institutions, a central role in the function of regulating food sanitation parameters (Marsden, 1998; Belik et al., 2001). Therefore, social activism, shaped as consumer movements and worldwide NGO campaigns – ‘‘played a key role in molding emerging regulatory schemes’’ (Busch & Bain, 2004, p. 333); ‘‘due to relentless competition,’’ a panorama that shapes competition strategies of retail corporations, individual firms and private associations have adopted a variety of initiatives, since they recognize that the revelation that products sold by them were (1) picked by child labor or highly exploited adult labor, (2) involved unnecessary suffering and/or inhumane treatment of animals, (3) resulted in environmental degradation, or (4) were of questionable safety, could easily result in a drop in retail sales throughout an entire supermarket chain. (Busch & Bain, 2004, p. 333.)

The development of such a context brought about the appearance of third-party certifiers,9 ‘‘public or private organizations responsible for accessing, evaluating and certifying quality and safety claims based on a particular group of methods and standards’’ (Hatanaka, Bain, & Busch, 2005, p. 355). These new mechanisms may appeal to ‘‘techno-scientific values such as independence, autonomy, objectivity and transparency,’’ however, they also allow retail corporations to transfer certification costs and responsibilities to third-party certifiers (concomitantly benefiting from a group on international norms that standardize production and offering decisive means for the transmission of demands and organization of the chain in accordance to information gathered at the sales points, Hatanaka et al., 2005; Busch & Bain, 2004). This debate raises some questions. It is known that the food quality control system is ruled by multinational retail corporations’ supply standards. Therefore, we need to ask which social costs are involved in the ways in which agrifood systems adapt themselves to modern standards of food supply. Great emphasis is given to the establishment of private standards and certification as the main market coordination mechanisms, which reinforce the sense and amplitude of these changes (Nadvi, 2008; Ponte & Gibbon, 2005; Hatanaka et al., 2005; Busch & Bain, 2004; Busch, 2000). Barham, addressing the need for an overview of the main outcomes of what is to be called values-based labeling, points out that, to some extent, this new movement brought about by genuine social concerns is able to accomplish a wide range impact on the nature of market economy systems (2002,

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pp. 350–354). In sociological debates values-based labeling addresses the main critics of neoclassical economic assumptions regarding the market space, perfect competition, and economic rationality. Moreover, this movement can be regarded to incorporate the very sense of the concept of embeddedness crafted by Polanyi (1992) and Granovetter (1985). According to these theorists, modern chain actors are given the tools to situate market economies on concrete social structures and historical contexts by means of the reincorporation of issues of ethics and social values into the discussion over economic mechanisms (Barham, 2002). However, the translation of subjective social values into concrete processes, measuring parameters, and intervening instruments that help in a way to define such abstract concepts as environment and social sustainability, may be the regulatory mechanisms such as grades and standards or the establishment of dominant sectoral conventions that impose a hierarchy of disposition and objects, that should be more closely examined. In a local dimension, the modernization of the distribution sector restructures the food supply. New storage arrangement and the operating form established with other professionals involved in the distribution sector equip the quality control system implemented by the supermarket corporation. This occurs because the restructured format enables lower costs with reduction of losses and the quality control offered through its homogenization, made possible with the centralization of stocks. The coordination of the general supply of supermarket networks is managed by a distribution center responsible for intermediating suppliers and consumers, establishing a virtual transaction that separates logistic and commercial functions, and also predetermining to suppliers the quality standard sustained by the retail corporation in the name of the consumers, as proclaimed. In this scenario, the large retailer imposes a structural condition when it undertakes the function of guaranteeing the food supply for populations, and a social–political one when it establishes itself as the main agent in the food chain, by performing the role of coordinating its tendencies and behavior of the demand (Green & Schaller, 2000; Belik, 2005; Jansen & Vellema, 2004). It is, thus, in a position of establishing contractual clauses and operation standards that prioritize immediate interests. Gibbon and Ponte (2005) call attention to the processes and means by which ‘‘lead actors in value chains governed by global buyers, such as in the case of the market for fresh food and vegetables, to achieve flexibility and externalize functions.’’ The authors affirm that these actors’ ‘‘degree of success in doing so seems to depend on how well they are able to transfer

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relatively intangible information’’ or building up a set of competencies that assure their capacity to ‘‘standardize, codify and/or obtain credible external certification for increasingly complex quality content of goods and services’’ (Ponte & Gibbon, 2005, p. 22). Therefore, evidence shows that as much as in sourcing, the functions related to the hiring of labor and services entail a competence of corporate retailers which puts pressure over the quality attributes of such services. The companies that act in the distribution sector in logistic functions and enter in contact with large agents in this sector are found in a growing process of pressure for the optimization of operations. Such process shows a tendency to intensify as pointed out by dissatisfaction rates with the technical dimension of this sector (Figueiredo, Hijjar, & Lavalle, 1998; Arkader, Figueired, Lavalle, & Hijiar, 1999; Lavalle, 2004a, 2004b). These outcomes have grown in spite of the rationalization and optimization process of these functions (Green & Schaller, 2000), in addition to the increase in the outsourcing practice for these operations with specialized companies (Figueiredo et al., 1998; Arkader et al., 1999; Lavalle, 2004a, 2004b). These figures suggest a tense professional situation in which the social actors in this dimension of the food distribution sector are immersed. Flexibility in working hours, and staff shifts in different sectors, are responses to the pressure over the readjustment required by this field of work. The constant pressure for the improvement and optimization of the service’s quality standards operates upon the professional profile of workers in this area, depriving them of lasting resistance strategies usual in previous situations common to the Fordist period. Strategies such as the empowerment of the syndicalism – in the case of drivers – still focused on basic demands such as salary increase and total exemption of losses due to accidents. The demands for adapting to an inexorable global operating standard focus on the optimization of time–space relationships principles: minimization of effective transport time and product delivery or lead time, number of service flaws near zero, efficient support for problem correction, constant incorporation of the most modern cold-storage technologies, and information management. These demands suppress the bargaining potential of other players. While the use of third-party transport is distinguished by technical optimization, logistic circuit phases are brought to circumstances that ultimately resulted in hindrance to the new third-party employees that participate in this system. Truck drivers and professionals in the coordination of deliver routes and personnel, freight forwarding, and maintenance of the vehicles are included into a combined network of pressure in their work

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rhythms and practices in the sense of a established market hierarchy. Therefore, the operational know-how of these actors have to keep pace with a daily evolving perception of product quality, reflex of the incorporation of abstract anxieties, and demands over food and safety. These new specialized functions carried out by third-party operators demanded new professional profiles and skills. Those required skills extrapolate what is traditionally seen in the description of the transport service, which is the guarantee of the transported good’s integrity and the maintenance of its characteristics and quality attributes. Social actors come into this field needing to submit to a continuous sophistication of a tacit know-how that informs innumerable erratic occurrences within the logistic circuit. This adaptability is a skill that implies a proficiency in improvising to different types of eventualities, a number of them attached to the constant need of service tailored for the corporate players that govern the quality of foods. These processes engender a field in which professional and social faculties mingle with the aim to provide fast responses to lead players’ needs, by their turn founded in the capacity to grasp and transform quality attributes and perceptions. In this field of action, local actors have little room to elaborate forms of resistance and effective demands. According to Castells (2001), in the present history of the nations, information transmission and diffusion technologies become a prerequisite for economic survival of countries and corporations. However, as the author states there should not be any direct relationship between the incorporation of new technologies and structural unemployment. What happens in many cases is that the use of these technologies in the modernization of production substructure aims exclusively at cost reduction and immediate productivity increase and short-term profit. Castells explains how such a fact constitutes a specific historical and political option and does not constitute an inherent tendency to technology itself as it is exemplified by the comparative study of modernization in the American, European, and Japanese automobile sector (Castells, 2001, pp. 270–271). The author also explains that the potential of informational labor productivity only reaches its peak through characteristics of the developed informational productive process (Castells, 2001, p. 264). Converging with such arguments around the mark of institutions that characterize a new period in which the global integration of capitals and dispositions are highlighted (Castells, 2001), we see the delimitation of the context drawn by local experience. The strategies developed by a transport company to maximize its resources – promoting retention of the information generated in its sector by its employees and adapting to the

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need of a continuous operational optimization in face of investment conditions – show approximations between the local market and the more general processes the international market goes through. A process develops under the hierarchy of social forces that make up this space, where the pressure of adapting to a new organizational structure occurs through the influence of existing material and human conditions, and conflicts in the sphere of daily practices of different social actors involved in each point of the chain where fresh food circulates.

CONCLUSION The reorganization of international supermarket corporations toward a flexible managing standard and global sourcing fits into a more encompassing picture through which global capital passes through, working in the sense of accelerating the compression of time–space categories, as argued by Bonanno (2007). While multinational retailers bring quality and food safety standards to consumers around the world, they also restructure relationships with local agents by imposing operation principles that are radically more agile in accelerating capital circulation. On one hand, the present agendas such as consumer rights and technical norms socially anchored begin to stand out (Bonanno, 2001; Guivant, 2003; Busch & Bain, 2004; Hatanaka et al., 2005). On the other, the proportions of the technical organization of sales establishments and logistic networks of such corporations establish new systems and functions that change the operating rhythm of other local agents. Local firms brought into the labor market built within new operating conditions (small- and medium-sized corporations that grew in the void left by others’ contrition or bankruptcy) end up in a scenario where they have extremely reduced bargaining power concerning the negotiation of contractual conditions. Due to the volume of business, the multinational corporations and independent contractors in transport are left with few alternatives such as migrating to other markets or offering their services to more flexible shipper clients. Drivers can be found on the extreme side of this system, still demanding primary contract rights through frail associations, experiencing at all times the threat of dilution of previously acquired labor rights and living the permanent risk of becoming victims of cargo highjacking or, ultimately, injury or death by accident. Located in the field of transportation of refrigerated goods, a service considered as premium in the logistic chain of fresh food, the social actors in this sector have

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supermarket chains as their target contract, one of the few corporations willing to cope with the costs of this system. With this reality in Brazil, particularly in Recife as the case study shows, the conditions of the unfixed demand for the service to be performed to compete in this sector, the malleability of individual contractors must be unlimited, in particular in the field of labor. Producers, local companies, truck drivers, and consumers are sharing risks in a highly hierarchical system of power and become involved in a web of relations that end up giving global chains the possibility of profit earnings and accumulation of power. These aspects influence resource management and problems that, by the very sort of activities carried out by these companies, affect the mobility of labor. Caught up amid this dynamic relationship, as Harvey (2005) would argue, this labor force of truck drivers and local producers lacks alternatives and means, given the restricted level of investment of local companies. Hence, these processes contribute to the broadening of flexibility levels in which routines, toil, and challenges presented in the field of the globalization of agrifood systems evolve. With the transformation of the paradigm of food distribution, there arise new coordinating and managing functions in order to support the restructuring of multinational retail corporations and the creation of tools and mechanisms for a more efficient quality control. In this context of power relations among the actors involved in activities subjected to usual distress, there is pressure regarding efficiency. Evidence of this is more clearly seen in the final processes of quality assessment, by which final liability over eventual failures in the logistic circuit are conveyed. Comprehensibly, this process is not related to professional competencies but to the actual bargaining capabilities of each of the parts participating in the system. As seen in the Recife food distribution sector, drivers and new professionals to the transportation of food embrace job opportunities and investment, brought into a new and risky field of work created within fresh food. Global chains and individual actors need to adapt their perspectives and strategies in accordance to the existing relationships and difficulties in this field. Consequently, the truckers professionals analyzed have been adapting their bodies and minds to work 24 hours a day, overcoming personal, social, and political hardships in order to be able to handle the demands of supermarket organizations. A broader structural domination is imposed on these social actors, incorporating a captivity-like situation (Lopes, 1976, p. 83) in any moment of their jobs or even in their leisure time, due to the flexibility they need to adjust to the competitive market. These professionals can travel over 4,000 km a month and in the next day they are 500 km away from their

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homes unaware of how much time they can spend with their families and friends before being called on for an emergency delivery, filling in for a sick coworker, to recover a stuck cargo, among other unpredictable obstacles that cannot hold back the supply of commodities of international retail corporations. While handling the instruments provided by intellectual or social capitals built in their action field, these social actors have to be in tune with the conflicting situation and still be able to handle the pressure exerted by the agents who lead the main transformation processes in the FFV chains. Many issues arose from the information brought by this study that, focusing the backstage of the process of quality construction, managed by these corporate retailers, enables us to inquire about the forms and costs on which this system is established. In this way, the possibility of standardization, besides elements in consuming habits (environment, forms of exposure, food quality, control of evaluation parameters) and the consumers themselves (Busch, 2000, pp. 277–281) must be accounted for. Modes of operation and logistic systems employed in the sector, their contractual relations and those established between individual actors directly involved in it compel a reflection regarding the possibilities for local action in the globalization process of agrifood systems, and that of the actual sustainability potential of this to local actors and markets in view of late capital advancements.

NOTES 1. The difficulty in acquiring authorization for field instruments such as a sound recorder in a number of situations and tension surrounding the work tasks and the constant surveillance and control of the standard. 2. This work is an outcome of a sequel of discussions on the research group of Agriculture Globalization (UFPE). 3. This fact shows how in many cases transportation service became a burden for supermarket corporations, since it differed from the corporation’s activities and demanded specialization and exclusive knowledge. 4. Interview fragments extracted from the final work submitted to obtain the degree of bachelor in social sciences in the Universidade Federal de Pernambuco (Dias, 2003). 5. Term used by interviewed informers to refer to the cargo containers of trucks. 6. Castells (2001, pp. 178–181, 194–195) observes that based on the organizational policy of the Japanese Kan Ban company model, ‘‘knowledge creative companies’’ are those which are ‘‘based in the organizational interaction between explicit and tacit knowledge as source of innovation y achieving by that not only effective

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communication and the increase of workers’ experience, expanding the company’s formal set of knowledge, but also, externally, conceived knowledge may become incorporated on workers’ tacit habits. That enables these workers to use this knowledge in the improving procedural patterns.’’ 7. This field is opposite of refrigerated cargo in terms of the complexities of the service, in the same sense as the transportation of fuel or toxics imply a higher level of service specialization. 8. Dias (2003). 9. From the original ‘‘third-party certifiers’’ in Busch and Bain (2004) and Hatanaka et al. (2005).

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Jansen, K., & Vellema, S. (Eds). (2004). Agribusiness and society: Corporate responses to environmentalism, market opportunities and public regulation. London: Zed Books. Lara, S. M. F. (1998). Nuevas Experiencias Productivas y Nuevas Formas de Organizacio´n del Trabajo en la Agricultura Mexicana. Me´xico: Juan Pablo Editor. Lavalle, C. (2004a). O Servic- o de Distribuic- a˜o Fı´ sica Como Fator Determinante no Processo de Decisa˜o de Compra do Come´rcio Supermercadista (Parte 1). Rio de Janeiro: CEL – Centro de Estudos em Logı´ stica. Retrieved on August 24, 2005. Available at http:// www.cel.coppead.ufrj.br/fspublic.html Lavalle, C. (2004b). O Servic- o de Distribuic- a˜o Fı´ sica Como Fator Determinante no Processo de Decisa˜o de Compra do Come´rcio Supermercadista (Parte 2). Rio de Janeiro: CEL – Centro de Estudos em Logı´ stica. Retrieved on August 24, 2005. Available at http:// www.cel.coppead.ufrj.br/fspublic.html Lopes, J. S. L. (1976). O Vapor do Diabo. O Trabalho dos Opera´rios do Ac- u´car. Rio de Janeiro: Paz e Terra. Marsden, T. (1998). Consuming interests: Retailers, regulation and the social provision of food choices. Cardiff, Wales: University of Sheffield. Marsden, T. K., & Cavalcanti, J. S. B. (2001). Globalisation, sustainability and new agrarianregions food labour and environmental values. Revista de Cio˜ncia & Tecnologia, Brasilia, v. 18, p. 39–68. McMichael, P. (1994). The global restructuring of agro-food systems. New York: Cornel University Press. Mota, D. M. da (2005). Trabalho e Sociabilidade em Espac- os Rurais. Fortaleza, Brazil: Embrapa, Banco do Nordeste. Nadvi, K. (2008). Global standards, global governance and the organization of global value chains. Journal of Economic Geography, 8, 323–343. Polanyi, K. (1992). The economy as instituted process. In: M. Granovetter & R. Swedber (Eds), The sociology of economic life (pp. 29–51). Boulder, CO: Westview Press. Ponte, S., & Gibbon, P. (2005). Quality standards, conventions and the governance of global value chains. Economy and Society, 34(1), 1–31. Raynolds, L. (1994). The restructuring of third world agro-exports: Changing production relations in the Dominican Republic. In: P. McMichael (Ed.), The global restructuring of agro-food systems. Ithaca, NY: Cornell University Press. Renard, M.-C. (2003). Fair trade: Quality, market and conventions. Journal of Rural Studies, 9(1), 87–96. Schaeffer, R. K. (1997). Understanding globalization: The social consequences of political, economic, and environmental change. Lanham, MD: Rowman & Littlefield. Wanderley, M. de N. B. (2000). A Emergeˆncia de uma Nova Ruralidade nas Sociedades Modernas Avanc- adas; o Rural como Espac- o Singular e Ator Coletivo. Estudos, Sociedade e Agricultura, 15, 87–145.

PART II SPACE AND TIME REORGANIZATION IN NORTH AMERICA

CHAPTER 4 THE CHANGING CHARACTER OF SMALL TOWN ONTARIO: TRANSNATIONAL CAPITAL/ LABOUR FLOWS IN A NOTSO-GLOBALIZED-WORLD$ Joa˜o-Paulo Bola Sousa ABSTRACT Canada’s rural economy today is a dynamic source of economic growth and jobs are available in the natural resource extraction, manufacturing, agrifood and service sectors, yet despite this relatively favourable outlook, a profound socio-economic transformation is taking place. Within Ontario, the nation’s largest and most economically diversified province and the focus of this study, the agri-food sector seeks new ways to deal with heightened competitive pressures and unstable commodity prices, in part by securing a relatively inexpensive and reliable labour force, while $

This chapter is based partially on research connected to a larger study entitled ‘‘Diverse Workplaces, Homogenous Towns’’ and supported through the Ontario Ministry of Agriculture, Food, and Rural Affairs’ (OMAFRA) Sustainable Rural Communities Program in partnership with the University of Guelph.

Globalization and the Time–Space Reorganization: Capital Mobility in Agriculture and Food in the Americas Research in Rural Sociology and Development, Volume 17, 109–145 Copyright r 2011 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1057-1922/doi:10.1108/S1057-1922(2011)0000017007

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transnational auto-parts firms have looked increasingly to small town Ontario as fertile ground to transplant new ‘flexible’, niche manufacturing facilities. This multifaceted process has had a distinct impact on the regional economy, migratory labour flows and community social dynamics. As Harvey (1996) makes note, the effects of capital’s re-spatialization have been uneven, and the state’s role in this process contradictory, simultaneously facilitating capital mobility while regulating labour’s (im)mobility (see also, Peck, 1996; Antonio & Bonanno, 2000). This chapter presents research findings and examines the impact of capital/labour flows on the changing character of three small communities in the heart of rural southwestern Ontario – Bradford, Strathroy and Tillsonburg – with a particular focus on the conditions under which migrants and immigrants are socially included and excluded from the communities where they work. Based on these case studies, I argue that while small town Canada has managed to benefit partially from opportunities linked to a globalizing economy, the formal and informal means of socially incorporating this new transnationalized labour force is lagging significantly behind, reflecting in fact a regressive turn in Canadian labour-market regulation and immigration policy, while the concern for sustainable community development is largely ignored.

INTRODUCTION Globalization is often considered to be a primarily urban-based phenomenon characterized by the dismantling of socio-spatial boundaries, growing interconnectivity and the rising influence of a post-industrial economy. Proponents claim the world has become a smaller place, national divisions made irrelevant as capitalist markets internationalize and technological advances facilitate the creation of a competitive global level playing field where the industrious and highly driven can thrive (Ohmae, 1991; Friedman, 2005). For many mainstream analysts, the unexpected collapse of the communist bloc seemed to confirm this apparent ideological victory of economic liberalism over other historical possibilities (Fukuyama, 1992). Among critically orientated researchers of globalization and contemporary state–society relations, however, analysis reveals a far more duplicitous, conflict ridden and contradictory process at work, which questions seriously the unbridled triumphalism associated with today’s new orthodoxy. David Harvey (1990, p. 284) suggests the ‘intense phase of time-space compression’ brought about by globalization ‘has had a disorienting and disruptive

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impact upon political-economic practices, the balance of class power, as well as upon cultural and social life’. Echoing this view, Robert Antonio and Alessandro Bonanno (2000) and Bob Jessop (1999) stress the ongoing shift from a Fordist to a post-Fordist model of accumulation is the underlying materialist dynamic giving shape and expression to the current globalizing neo-liberal order. The principal consequence of this transition, these authors caution, is a reassertion of capital’s interests and influence in the world economy, which is in fact better understood as a reactionary strategy against previous modes of statist regulation intended to curb its power during the so-called golden era of Keynesian compromise and accommodation. Yet as we shall discuss in greater detail, increasingly, the rhetoric regarding globalized space and free markets as the basis for prosperity and greater social mobility is becoming confronted and challenged by a new reality of restricted places, growing social polarization and heightened immobility. As Saskia Sassen (1998) points out, examining carefully the multifaceted processes of globalization highlights the contradictory role played by the neo-liberal state and the differential outcomes to arise from such a project. In this chapter, I focus upon the reconfiguration of capital/labour flows that is taking place in the heart of small town Ontario and lend credence to the critical approach noted here, arguing that globalization is indeed a JanusFaced process that frees-up certain economic actors while putting others in their place. In recent years, a growing number of empirically based case studies on globalization have emerged in the North America context highlighting the heterogeneous, uneven and place-based impacts to emerge from recent socioeconomic transformations at the global level (Lobao, 1990; Rothstein & Blim, 1992; Fink, 1998; Nelson & Smith, 1999; Winson & Leach, 2002; Falk, Schulman, & Tickamyer, 2003; Bonanno & Constance, 2006). This research offers a useful correction to macro-orientated work that overlooks or neglects regional and sub-regional specificities. Community-focused research offers useful insight into how broad, apparently homogenizing trends unfold at the grass-roots level, and helps provide more nuanced understanding into the myriad of ways different social actors – people – confront, respond, negotiate and ultimately adapt to rapidly altering contexts of work and belonging. These studies, my own here included, are depicting a picture where pervasive globalizing forces co-exist uneasily alongside locally differentiated circumstances, and challenges mainstream understandings of globalization as a singular, coherent and urban-centreed phenomenon. Despite the fact that the vast majority of Canadians continue to live and work within a relatively small number of major metropolitan

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centres – Montreal, Vancouver and the Greater Toronto Area (GTA) alone accounting for just slightly less than half the nation’s total population – rural and small town Ontario appears to be in the midst of a period of unprecedented growth and expansion. To many rural sociologists, municipal planners and small town residents alike, this talk of ‘boomintimes’ might seem rather unusual given the numerous difficulties and challenges to have confronted many smaller communities throughout much of North America during the past few decades. The decline of traditional livelihood opportunities afforded by agriculture as a consequence of farmlevel corporatization and industrialization, coupled with a low endogenous population growth rate and high youth out-migration raised questions about the long-term viability and sustainability of these communities. While many of the underlying structural factors contributing to these issues have not been addressed, let alone resolved, this chapter examines evidence highlighting the creation of thousands of new manufacturing jobs and sharp demographic increase occurring in three small communities located on the edge of south-western Ontario’s disappearing rural heartland. These research findings are supported by recent Statistics Canada (2007) data noting the significance of urban sprawl, which is a major factor driving the development of these smaller, nearby communities. Ontario’s rural economy is globalizing rapidly as recent transnational capital investment flows have sought new localities to establish productive infrastructure, reshaping the socio-economic landscape in its aftermath. Automotive component producers in particular are looking towards smaller communities in rural south-western Ontario as preferred sites to set-up new flexible, ‘just-in-time’ manufacturing facilities, a trend that will only intensify given Toyota’s recent decision to locate a new automotive assembly plant in the community Woodstock, a smaller city in the middle the province’s traditional farm belt. Within the agri-food sector, larger producers are attempting to take advantage of expanding markets for agricultural products and processed foodstuffs. The rapid proliferation of ‘hot-house’, or greenhouse production operations, will only fuel further employment demands looking forward. The case studies that are the focus of this examination – Strathroy, Tillsonburg and Bradford – are representative of many smaller communities across south-western Ontario whose local economies are being driven by the automotive industry and sustained by the agri-food sector. Such seemingly impressive employment gains and renewed optimism for areas long thought to be in decline, as we shall discuss, should be tempered with a more critical outlook given that most of these jobs are tied to an emergent generation of firms which

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organize their operations according to a new standard of ‘lean and mean’ management practices, a state of affairs quickly becoming naturalized as the ‘new reality’ in the current globalizing economic order, and their structural dependence on a highly contingent labour force. These trends should be considered a bellwether to a broader socio-economic transformation impacting rural and small town Ontario, which leads us to consider how transnational capital/labour flows are influencing local community development priorities and social relations. Drawing upon regulation theory (Marsden, Lowe, & Whatmore, 1990; Peck, 1996; Jessop, 1999) and analytical insights from the broader political economy literature more generally (Harvey, 1996; Jessop, 1999; Bonanno, 2000; Winson & Leach, 2002; Falk et al., 2003; Bonanno & Constance, 2006), this research examines key socio-economic forces and trends impacting work and community in rural spaces within close geographic proximity to major urban centres and transportation corridors. The interface between rurality and urbanization, oftentimes referred to as the rurban fringe, is a particularly interesting site to explore how processes of globalization and localization come to meet head-to-head, constituting the very contexts where people find themselves engaged in daily practices of sustaining households and making social life meaningful. I consider how recent waves of transnational capital investment and im/migratory labour flows, which are in fact enabled through state regulation, condition local development opportunities and social dynamics. Following Falk et al.’s (2003) suggestion, my discussion is informed by their concept of communities-of-work, and I consider it to be a useful analytical insight to link dichotomized notions of global/local, macro/micro, structure/agency, materialism/culturalism and outsider/insider into a more integrative perspective, thereby avoiding the trap of privileging one dimension of this complex and dynamic interaction at the expense of the other. Unlike laissezfaire economists and many social constructionists who tend to separate artificially notions of community formation and identity construction from economic relations, this study lends support to the idea that communities are formed and indeed sustained by work, which is itself shaped and reshaped by broader socio-spatial patterns of interaction. A critical examination of this linkage questions the progressive developmentalism that is often assumed to take place in much of the literature on regional planning and local community development. This chapter presents research findings and explores the impact of capital/ labour flows on the changing character of work and belonging in three small towns in south-western Ontario, highlighting the predominance of a new

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economic paradigm and its growing reliance on a contingent, transnationalized im/migrant workforce. Based on these case studies, I argue that while some smaller communities appear to have benefited from new opportunities created by a globalizing economy, the full-scale implications of this profound socio-economic transformation have yet to be taken into full consideration, particularly with regard to the goal of pursing more equitable and sustainable community development. Growth in these communities has been sudden, extensive and often inadequately planned for, as the formal and informal means of socially incorporating an emerging class transnationalized im/migrant workers lags significantly behind, and concerns with sustainable community development remain largely ignored.

Capitalizing on the Rural Edge in a Global Era To better understand the rationality and motivation underpinning why some large transnational corporations are looking to rural south-western Ontario as preferred sites to locate new production facilities, it is helpful to consider briefly some of the literature examining the crisis of Fordism and the ongoing shift to post-Fordist, flexible production strategies. Beginning sometime in the 1970s, researchers call attention to the start of a profound process of time/space reorganization taking place in the core of America’s industrial centres (Bell, 1976; Bluestone & Harrison, 1982, 1988; Piore & Sabel, 1984; Antonio & Bonanno, 2000). In a well-known study written by Barry Bluestone and Bennett Harrison (1982), the authors note how at this juncture capital began systematically disinvesting productive capacity from higher cost regions in the industrialized north-east and mid-west in search of more profitable alternatives elsewhere, part of a generalized trend often linked to Joseph Schumpeter’s (1942) idea of creative destruction as a precursor to reinvention and innovation. David Harvey (2006) suggests that the underlying impetus to re-spatialize productive capacity reflects a concerted effort by capital to reassert managerial authority over the labour process and respond to growing union militancy in U.S. urban cities with long histories of organized collective dissent. Historically informed researchers note that throughout much of the immediate post-war period, industrial policy and relations in the United States, as was the case in other parts of world, was influenced significantly by Keynesian inspired development priorities and Fordist production strategies. Manufacturing was targeted routinely by government as being of strategic importance to the national economy and considered a key force

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driving wealth creation. Influential American economist and political advisor Walt W. Rostow (1960), for instance, considered manufacturing for mass markets to be the final stage in the evolution towards economic maturation. Nation-States typically pursued economic policies supportive of industrial development and sought to minimize workplace conflict between capital and labour via legally channelled arbitration processes. To a considerable degree, this nationally orientated model of development and social regulation, which attempted to improve wage rates and working conditions as a means to securing macro-economic stability and competitiveness, should be seen as pivotal to the creation and realization of the so-called American Dream during the golden age of U.S. hegemony.1 The centrality of manufacturing at this time even comes to be reflected culturally, a clear indication of its widespread clout, as the domestically produced automobile is both epitomized and fetishized as the symbol of American prosperity and power. Alongside rising wages and living standards, however, came growing expectations and further calls for progressive reforms by various segments within civil society. The heightened labour unrest, social mobilizations and increased state interventionism that took place throughout much of the 1960s and 1970s, a consequence of real negotiation and accommodation-making, prompted many industrial firms and their political allies to look for new ways to stem this populist uprising and restore more favourable conditions for capital accumulation. Analysts note one of the longer term consequences resulting from this turbulent period was a reaction by many corporations to de-nationalize and re-spatialize business operations in order to pursue a new economic model based on the idea of ‘globalization’, and in so doing, undermined much of the previous socio-economic consensus (Jessop, 1999; Bonanno, 2000; Harvey, 2006). General Motors chief executive Charles E. Wilson is credited to have remarked rather infamously in 1953 that ‘what was good for the country was good for GM and vice versa’. By the 1970s this was certainly no longer apparent. General Motors, along with Ford and Chrysler, gradually began shifting production capability away from traditional urban manufacturing centres in the mid-west and north-east in favour of lower cost regions elsewhere in the United States and around the world, reflecting little if any nationalist loyalty in investment decision-making. Manufacturers in other sectors adopted a similar strategy as well. The scale of this protracted process of restructuring and subsequent capital re-spatialization, which resulted in the massive de-industrialization of America’s industrial heartland, was unprecedented. Drawing upon national-level statistical data from the United States, Bluestone and Harrison (1988, p. 4) estimate that some 22 million

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manufacturing related jobs were lost in the period between 1969 and 1982, with the mid-west hardest hit. High-paying unionized jobs in particular were the most common targets of intra-firm restructuring and permanent plant closures. Although U.S. manufacturing did recover somewhat in later economic upswings, as Steven High (2003, pp. 4–8) makes note, the sector as a whole has been undergoing steady relative decline ever since. For a number of converging circumstances, Canada managed to benefit considerably from this period of U.S. corporate restructuring and the various waves of transnationalized capital investment that were to ensue. To be accurate, historically speaking, border towns like Windsor did manage to attract investment from American companies – for instance, Ford’s initial investment in Walkerville, which was then amalgamated into the city of Windsor in 1935 – who were looking to avoid dealing with higher paid unionized workers on the other side of the Ambassador bridge as early as 1904 (Colling, 1995). This earlier phase of globalization, although interestingly enough foreshadowing what was to come, did not alter the predominately nationalist mindset prevalent among manufacturers on both sides of the border. Not until the signing of the 1965 Auto-Pact agreement between Canada and the United States, however, was the stage set for Ontario’s small and then struggling auto-sector to be transformed into a major global manufacturing powerhouse. John Holmes (2003) notes that there were considerable gains to be made by U.S. firms looking to locate branch-plant operations up north, including, for instance: lower employerborne health care costs as a result of the Canadian socialized health care system; more competitive wage rates; and a currency exchange rate generally more favourable to the U.S. greenback. The agreement itself provided key incentives to American-based automotive producers for committing to new investment targets – most importantly, an easily accessible and protected market – and important disincentives for lack of compliance (Anastakis, 2001). One of the legacies to result from this bilateral trade agreement, and coupled with the U.S. domestic situation outlined previously, was that Ontario stood to gain a growing share of automotive related manufacturing investment in the decades to follow while nearby traditional auto-producing communities south of the border slipped into decline. Although it may not seem immediately apparent given Canada’s high standard of living, southwestern Ontario did in fact offer a lower cost alternative to transnationalizing automotive producers looking for a ‘better deal’. Yet even within the Canadian context, the de-industrialization thesis could be said to apply, albeit with a twist and delayed by a decade or so. Throughout the Auto-Pact era, the Big Three auto producers and their

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component suppliers often exceeded required investment targets in southwestern Ontario as stipulated by the agreement, thereby helping underwrite the growth and vitality of the manufacturing sector – a clear indication of its profitability – and channelled the bulk of this investment to industrial cities along the 401 corridor between Windsor and Montreal. However, by the 1980s, and certainly after the FTA (1989) and NAFTA (1991) trade agreements, major signs of corporate restructuring and globalization became all too apparent here as well. There is a substantial body of evidence documenting these trends in the Canadian context along with the resulting impacts on the domestic job structure (Moody, 1997; Lowe 2000; Krahn & Lowe, 2002; Winson & Leach, 2002; Stanford & Vosko, 2004; Shalla & Clement, 2007). While a significant share of newly transnationally mobile industries did in fact restructure operations and migrate to lower cost, offshore free trade-enclaves to do business, the Canadian automotive sector managed to achieve the same end on home soil, suggesting that certain industries are more rooted-in-place than others. The sub-regional dispersion of manufacturing investment within south-western Ontario has allowed an increasing number of transnational firms to reap the benefits of lower cost greenfield sites while maintaining close, strategic access to traditional markets. Yates and Leach (2007), for instance, point to a gradual shift in manufacturing production from metropolitan cities like Toronto and Montreal to nearby sub-urban and rural areas between 1976 and 1996. Likewise, Leach and Sousa (2005) have sought to empirically document the ruralization of the automotive industry in south-western Ontario, which is spatially dispersing manufacturing capability away from the province’s traditional industrial centres, and arguably contributes simultaneously to urban decay – the growth in abandoned brownfield sites – and the boom in greenfield development. The recent arrival of a second wave of transnational capital investment from Japanese automotive firms is accelerating further a trend already well entrenched, as these manufacturers in particular demonstrate a clear preference for locating new production facilities in rural, low-union density communities, both in the United States and Canada (Mair, Florida, & Kenny, 1998; Florida & Kenny, 1991; Kingsolver, 1992; Saltzman, 1995). The re-spatialization of productive capacity in North America is driven by capital’s desire to increase managerial flexibility and avoid dealing with organized labour. At the same time, many smaller communities have managed to promote themselves as ideal places for new investment for a number of reasons in their own right. This study, for instance, notes that municipal authorities in rural south-western Ontario have been incredibly

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adept at marketing smaller communities as more cost-effective alternatives to nearby urban centres given their unique socio-spatial attributes, namely, lower union densities, lower average wage rates and cheaper ‘industrial’ land suitable for development. This rural advantage, as it is often referred to, is purported to offer capital the best of both worlds, rural and urban. Given south-western Ontario’s geographic positioning vis-a`-vis major urban markets – both in the United States and Canada – and highly developed transportation infrastructure, many smaller communities can be seen to be more competitively situated in the North American marketplace than their urban counterparts once labour costs and traffic congestion costs are factored into consideration (Leach & Sousa, 2005). For this reason, a growing number of automotive component producers are looking to establish new just-in-time manufacturing plants in small town Ontario in order to capitalize on this rural edge. Toyota Corporation’s decision to locate its newest assembly plant in Woodstock will surely accelerate this trend looking forward given that component suppliers typically follow suit locating facilities in nearby communities. The research reported on here highlights a significant amount of job creation taking place in smaller communities outside the province’s major urban centres. It is estimated in the three case studies noted here, that at least 3,000 new full-time manufacturing positions have been created in the last decade alone, well-paying jobs that yield significant multiplier effects.2 Not surprisingly, small town Ontario has undergone a sharp demographic increase in recent years and is now grappling with how best to deal with the population pressures that come along with rapid growth, which should be seen as a direct consequence of widespread and unabated industrial sprawl taking place at the sub-regional scale.3 Given the abundance of readily available low-cost and ‘industrially serviced’ land in rural south-western Ontario, weak zoning restrictions, plentiful labour supply and the expansion, or creation of new roadways, transnational manufacturing firms are settingup shop in the countryside to reap the benefits of these place-based attributes. Although reflecting a fairly recent phenomenon, this trend has already had a noticeable impact on local economic development opportunities, community growth patterns and social relations. Today, for example, just consider the fact that those living in places like Strathroy, Tillsonburg and Bradford are more likely to produce automotive products than primary commodities despite their long-standing agricultural heritages. The recent surge in rural and small town employment opportunities follows on the heel of a more general and protracted crisis in the agri-food sector. The fortunes of smaller communities in south-western Ontario, as is the case elsewhere in North America, have tended to wax and wane during

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the past few decades as traditional livelihoods decline – especially in family farming and tobacco production – and young people look to migrate to bigger cites in search of better options. While overall agricultural related employment is declining steadily as a result of farm-level mechanization and industrialization, some sub-sectors like tender fruits, vegetables and food processing continue to employ substantial numbers of people given the more labour intensive needs of the industry, which has actually aggravated longstanding labour shortages in some localities despite overall trends (Satzewich, 1991; Basok, 2002). Tight labour markets in these communities are further strained by the growing demands of im/migrating manufacturing firms. With many of these communities registering unemployment rates well below the national average, some municipalities are being confronted with the prospect of pending labour shortages and the challenge of how to better attract new labour flows. Kerry Preibisch (2004) notes that the agricultural sector has managed to offset some of this demand through a state administered labour mobility program employing over 16,000 foreign-contracted workers annually, a clear indication of the magnitude of the problem. As a result of the changing patterns of economic development noted here, this research also calls attention to the growing presence of an urban-based class of commuter workers traveling to rural workplaces to take up jobs. Many of these individuals were found to be recent immigrants looking to establish a foothold in the labour market however possible. Given the overwhelming tendency for new Canadians to resettle in urban centres, there is currently heightened interest among various levels of government to redirect immigrant labour flows to rural areas on a more permanent basis as a strategy to address more effectively some of the employment needs highlighted above. Community Case Study Findings: Strathroy, Tillsonburg and Bradford 4 Ontario is commonly thought to be both the literal and figurative centre of Canada, and is the nation’s second largest province in total land area. Given its enormity, it is helpful to think of the province as geo-socially divided into two distinct entities: north and south. Northern Ontario comprises the bulk of the land mass with a low population density and the economy dominated by natural resource extraction activities. Southern Ontario, which is the regional focus of this study, is notable for a number of reasons, not least of which is its unique geographic landscape features and higher population density. Circumscribed on all sides by large lakes and river systems except for a narrow patch of territory to the north-east, the peninsula, as a region, is home to the single largest concentration of people, industry and productive agricultural cropland in the country. While the rest of Canada might seem

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vast and limitless, the natural physical contours of south-western Ontario ensure that rural spaces and urban places are much more linked together and confronted by each other’s presence than might otherwise be expected. Agriculture and manufacturing each boast of deep historical roots in the province, and periodically expose competing priorities and conflicting interests taking place within society. Whereas farming once reflected the central economic pillar of many communities and helped nurture an early vibrant manufacturing industry, today, manufacturing – particularly in the automotive sector – dominates the regional economy while agriculture has since taken a back seat. The communities under investigation here were selected because of their geographical location within the province, especially in relation to the major metropolitan areas, the 400 series highway corridors, and the presence of both agri-food producers and automotive parts manufacturers (see Map below). Agri-food production and automotive component manufacturing each draw-upon unique skill-sets and firms often recruit their employees from different segments of the labour market. Despite this tendency, both sectors were found to exhaust the local labour supply and as a result, began functioning as an economic ‘pull factor’ attracting transnational immigrant labour flows to help satisfy growing employment demands.

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Strathroy The Township of Strathroy-Caradoc is a newly reconstituted community of nearly 20,000 residents. The community is approximately 170 km north-east of Windsor/Detroit and in close proximity to Highways 402 and 401, connecting it directly to major Canadian and U.S. cities. The community is also linked to major markets through two railway services. The rural settlements which constitute Strathroy-Caradoc are long-standing agricultural producers of a wide range of commodities that gave rise to a robust food-processing sector. The community has also developed a diversified industrial base that includes the recent arrival of several transnational automotive component producers. Not surprisingly, the agricultural and manufacturing sectors, respectively, account for 11% and 27% of the community’s total employment base. All of this has contributed to building a thriving local economy with an unemployment rate below the national average (5.4%). Although visible minorities comprise only 1.7% of the population, roughly 16% of residents are foreign born, a result no doubt of the rather large Dutch and Portuguese communities. Tillsonburg With a growing population of over 14,000, Tillsonburg is the second largest community in Oxford County and located some 175 km south-west of Toronto. Once a prominent tobacco-growing and processing centre for the region, this sector has declined dramatically in the past few years because of government imposed restrictions stemming from public health concerns with smoking-related illnesses, although the crop itself remains highly lucrative. The economic base of the community is also diversifying and becoming more industrialized as a result of im/migrating manufacturing firms. At present, automotive-related manufacturing work employs 35% of the local labour market, while a significant portion of the remainder continues to rely on agricultural activities. Despite the significant structural transformation of the economy in recent years, the community’s unemployment remains just below the national average at 6%. Of the three communities examined, Tillsonburg was found to be the least culturally diverse according to national census data, although some visible minorities – namely south-east Asian and Chinese – were noted to have moved into area. Bradford The township of Bradford West Gwillimbury, another recently amalgamated community, is located on the northern fringe of Canada’s largest city, Toronto, and is populated by approximately 22,145 inhabitants. Situated on

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Highway 400, Bradford is a short 30-minute commute from the GTA. It is also serviced by an important railway link. Municipal officials often boast of the community’s ‘small town feeling’ while noting its strategic proximity to major markets and urban centres. Bradford is also adjacent to the Holland Marsh, an ecologically rich, flat terrain, which sustains a thriving agricultural sector. Indeed, the town is considered the ‘carrot capital’ of Canada, although local growers produce a number of other field crops for domestic and international markets. While agriculture remains an important economic mainstay, the majority of working residents are employed in the service (47%) and automotive parts manufacturing (21.5%) sectors. Bradford’s unemployment rate stands at 3.5%, nearly half the national average. The cultural composition of the community is moving gradually towards greater diversity as well. Long-settled Dutch and Portuguese immigrants constitute a sizeable segment of the local population, while more recently, visible minorities – particularly south-east Asians – have begun moving into the area and now comprise 6.5% of the total population (Statistics Canada, 2006). Strathroy, Tillsonburg and Bradford, like many other smaller communities in south-western Ontario, have been subject to numerous periodic economic downturns and episodic bouts of plant shut-downs, downsizing and restructuring over the past few decades. At the same time, these communities also appear to be the beneficiaries of new flows of globalized capital investment, as aggregated socio-economic data does suggest some grounds for optimism. This mixed picture and constant state of flux makes arriving at definitive statements regarding the overall vitality of the regional economy, or the direction of current social trends, somewhat of a problematic undertaking. For instance, some family farms might go bankrupt while others consolidate and expand; some firms may go out of business or relocate to other localities, while others still, establish new operations or move into town from elsewhere. In many cases, indicators of decline and expansion co-exist and seem to characterize incongruous social realities taking place within the same spatial and temporal domain. Understanding this complexity requires that we do not oversimplify observable patterns and rush to one-sided, monolithic conclusions, nor does it necessarily prevent researchers from attempting make sense and comment upon ongoing processes of socio-economic change. It is my contention here, that by looking at the edges, both in terms of apparent economic successes and failures, we are able to learn a great deal about the underlying forces and interests driving such change, and come to a better appreciation of who shoulders the burden of these sorts of adjustments.

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Growing Unmet Employment Needs The most striking theme to emerge from interviews with major private sector employers in each of the community case studies was the growing degree to which many firms were encountering challenges recruiting staff to meet operational goals. All of the employer respondents selected noted that they were either experiencing significant difficulty obtaining the labour supply necessary to run production at full capacity, as justified by current demand levels, or anticipate doing so in the near future. One human resource manager at a large auto-parts facility remarked: Our single biggest challenge as a growing business in the community right now is ensuring that we are able to attract the right kind of people with the right kind of skillsets in a labour pool that seems to be drying-up quickly. We’re starting to encounter real difficulties finding the skilled-trades personnel we need to run our production lines, particularly electricians, mill-wrights and engineers. This is going to a big problem for a lot of big employers in smaller communities like [this one], and the solution is going to require a major collaborative effort between business and government. We don’t have any trouble getting general labourers at our plant, but experienced skilled workers are very difficult to come by.

For auto-parts manufactures, attracting the needed professional staff and skilled trades’ people was a re-occurring area of concern, while recruitment for their ‘blue-collar’ workforce was seen to be much less problematic. In contrast, employers in the agro-food sector overwhelmingly noted difficulty obtaining both skilled and unskilled workers for their operations. Another human resource manager at a food-processing plant put it this way: Yes, we’re having a real hard time finding the people we need to keep things running smoothly, and we’re trying to find creative solutions to deal with this problem. It’s hard to find local people who are reliable and willing to work at this pay-scale [$9.50/hour]. When you’re competing against auto-plants that pay $14.50 an hour to start, it’s hard to get people to work here instead. We just don’t have the margins to be able to pay people that muchyWith our higher skilled positions we also can’t find the people we need locally, so we’re constantly looking outside the community to attract those with the skills we require to come here. It’s a big challenge for us!

These excerpts begin to highlight an interesting and ongoing dynamic in workplace valuations. Relative to urban-based automotive manufactures, the starting pay-scale in small town auto-part plants was found to be substantially lower (35–45% less), however, when compared to other employment opportunities available in the community, these jobs actually reflected the highest paying and most sought after positions by local workers. Regardless of the skill level involved, auto-parts jobs are generally

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considered to be well-paying occupations that sit at the top of the local occupational hierarchy. So much so, that they even manage to attract a sizeable number of workers from the surrounding areas who are willing to commute up to an hour-and-a-half daily to take up these positions. In contrast, and because of the tighter margins afforded to the agri-food sector, these employers often noted with frustration the difficulty they experienced competing with the more lucrative salaries offered by auto manufactures, who were routinely accused of being primarily responsible for inflationary pressures taking place in the local labour market along with ‘poaching’ the most desirable workers. In addition to offering lower wages, the demand for labour in the agri-food sector tends to fluctuate seasonally and there is a widespread perception that work is more enduring and ‘dirtier’. When combined, all of these factors certainly contribute to making such jobs less desirable, especially to workers who have the luxury of being ‘choosy’. With professional and skilled-trade occupations, although employers were willing to offer what they considered to be premium wages – above $14.50/hour – the lack of interest by qualified applicants seems to suggest that this inducement was in itself insufficient to justify relocation by qualified outsiders, given that local talent was said to be unavailable. What became quite apparent with the employers interviewed in this study was that they generally experienced the greatest difficulty recruiting workers at both the ‘high end’ and ‘low end’ of the job market. Historically, Canada has long relied upon im/migratory labour flows as a way to respond to periodic personnel and skill shortages, as well as ensure overall population growth. The case study communities under investigation were certainly home to sizeable numbers of foreign born Canadians, most of whom were of European ancestry, which is reflective of an older pattern of immigrant resettlement. Partly as a result of this past, newcomers from other countries are generally regarded favourably within the community when considered by international standards, and often are sought after by employers because of a perceived willingness to work harder. As one human resource director mentions: y we employ a lot of new Canadian’s and a lot of them do come from a farming background. Many have grown up on a farm in their native country and they have all those types of experiences. Some of them have higher education and come here to get their feet on the ground and get stabilized. With regard to our workforce here, we definitely like to have new immigrants. They work out really well for us here, many have a rural background and have that hard work ethic; they have that eagerness to work and make something for themselves. I guess you could say they have more of a passion to work then many Canadians born here because they are new to this country and they’re

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trying to make something for themselves y We find them very dedicated and reliable workers.

Another manager at a food-processing plant put it more bluntly: [I]mmigrants are much more open to opportunity. They will accept lower wages and work harder for it. Immigrants will take up jobs that a lot of young men in southwestern Ontario simply won’t takey

In each of the communities examined, employers across the board remarked that they are hiring individuals from an expanded range of ethnocultural backgrounds, including those from southern and eastern Europe, Latin America, south Asia, south-eastern Asia and sub-Saharan Africa. These im/migrant workers are found to be taking up a variety of skilled, semi-skilled and unskilled jobs, including, for example, manufacturing engineers, food safety specialists and production line workers. Despite a trend towards growing workplace diversity, there was a noticeable difference in the residency settlement patterns and socioeconomic status between older immigrants and their more recent counterparts. ‘New Canadians’ from a previous generation of migration, the overwhelming majority being from European backgrounds (e.g., Dutch, German, Italian and Portuguese), where more likely to be permanent local residents and have their ethnic group identity represented prominently in the community through cultural institutions, retail shops or restaurants. Many of these individuals mentioned that they came to Canada with very little money and education, but with hard work and thrift were able to prosper in their new homeland. By comparison, more recent im/migrants, who tended to be so-called ‘visible’ minorities, were often commuting to work from nearby urban centres, or brought to Canada on a temporary basis through a federal labour ‘mobility’ program. Their ethnic group identities were certainly less visibly present within the community. Interviews with this more recent cohort of newcomers indicated that the vast majority of the permanent immigrants were in possession of college or university accreditation prior to arrival, whereas other researchers note temporarily contracted offshore workers generally have substantially less formal education (Satzewich, 1991; Basok, 2002; Preibisch, 2004). Evidence from these case studies points firmly in the direction that longer established immigrants, irrespective of educational attainment, were more likely to be economically stable and rooted in the local community. In contrast, and despite holding higher educational credentials on average, more recent arrivals were often found to be struggling to get ‘established’, reluctant to resettle on a more permanent basis within the communities where they

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work, or legally required to return to their country of origin after completing work-stays, as was the case with temporarily contracted foreign workers. These findings echo research by Peter Li (2003) and others who find that despite holding less formal education, older immigrants fare much better economically than newer arrivals, which suggests recent transnationally mobile labourers are experiencing substantial barriers to socioeconomic integration within their new communities-of-work (Reimer, 2007). Changes to im/migrant resettlement patterns did not go unnoticed by local employers. In fact, they were often cited as a key source of concern by human resource personnel within the agri-food sector. As one plant manager explained: We have a very diverse workforce y. We have all kinds of people of different cultural backgrounds working here including, Dutch, Portuguese, Sudanese, Polish, Iraqi, and Yugoslavian; pretty much anything you can imagine, we’ve got. Our company began with a sizable Portuguese contingent and they continue to reflect the bulk of our fulltimers. However, this group is getting older and is on the verge of retirement. We’re very worried about the succession of our workforce and will need to start thinking creatively how we’re going to address this problem in the near future.

Several other community employers expressed similar uncertainty with how they were going to be able to replace their currently aging ‘blue-collar’ workforce. This research finding highlights a troubling prospect facing employers looking to attract new workers, and smaller communities wanting to avoid de-population. While an older generation of immigrants was in fact willing and able to relocate to non-metropolitan areas to work and become part of the local community, more recent arrivals are found to demonstrate a clear reluctance or inability to do so. For instance, among the major employers interviewed, respondents indicated that somewhere between onethird to just under half the workforce is now commuting from outside the community, and the vast majority of these individuals were said to be recent im/migrants.5 If foreign workers contracted on a temporary basis to take up apparently unwanted job opportunities were to be included, the proportion of non-resident workers in the community increases substantially. For both voluntary and involuntary reasons, these small town communities would appear to have become less attractive places for current flows of transnationally mobile immigrant labour. Because major employers were encountering difficulties attracting both unskilled and skilled workers to take up local job opportunities, human resource directors began looking into newer, apparently more innovative methods to labour recruitment. Addressing the possibility of a future labour shortage was generally seen to be a problem that could be overcome, not an

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indication of the unsustainable nature of development trends, or the failure of current im/migration resettlement efforts. A plant manager at an autoparts firm explained the situation as follows: We like being located in [this community] and find it to be a great place to do business. We’ve got a lot of community support here. We’re non-union and we would like to remain a non-union shop. That’s certainly a major factor giving us the flexibility and ability to succeed and competeySure there’s competition for skills and good people, and labour markets are starting to tightenybut that’s a challenge, certainly not insurmountable.

Another human resource director suggested: [W]e need to start getting creative and look into all the options: attracting immigrants from nearby cities, temping agencies, or applying to get foreign temporary workers who want to work to come here. The traditional means of labour recruitment just aren’t going to work in the future.

Of all the employers questioned, 85% reported they no longer posted job vacancy adds in the local government funded employment centre; all respondents said they were now relying on private staffing agencies for labour-recruitment efforts. In the case of one food processor, the plant manager noted how they managed to successfully petition the government to grant them access to temporarily contracted foreign workers in order to help satisfy peak seasonal labour demands in their food-processing plant.

The Changing Face of Immigration Although Canada is a nation of immigrants, an important finding to highlight from this research is the growing reliance of employers on temporarily contracted foreign workers, which is being seen by some as an attractive alternative to labour recruitment through traditional immigration channels.6 This growth in the flow of temporary foreign labourers appears to be part of a globalizing phenomenon of controlling and managing migration processes that are considered to be both necessary and a potential source of insecurity. According to the United Nation’s Population Division, estimates place the number of temporary migratory workers to be between 10 and 15 million worldwide, the majority of which are destined for a dozen or so affluent nation-states. In Canada, the total number of non-permanent foreign workers reached a record of 171,000 in 2006, reflecting a 122% increase over the past decade (Statistics Canada, 2007). Within the province of Alberta, the number of temporary workers actually exceeded the number

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of those entering through the regular immigration system for the first time in history, while in Ontario, the overall number of ‘guest workers’ admitted has risen steadily over the years. The Temporary Foreign Workers Program (TFWP) is the primary regulatory vehicle used by the Canadian government to help employers respond to perceived skill and labour shortages by facilitating the recruitment of suitable foreign candidates for restricted employment opportunities. For the most part, small town employers and industry lobby groups have overwhelmingly embraced this so-called ‘labour mobility’ initiative. In response to mounting pressure by the business community, on January 14, 2008, Monte Solberg, Minister for HRSDC, announced the Conservative government’s plan to expand the TFWP to include a broader range of eligible occupational categories, along with efforts to expedite the recruitment process itself. There is clear and mounting evidence to suggest, as Kerry Preibisch (2004) contends, ‘that ‘‘temporary’’ visa workers are gradually becoming a permanent facet of the Canadian labour market’. Temporary foreign workers (TFWs) have played a critical role supplying labour for the province’s topsy-turvy agricultural sector since the 1970s. Originally justified as a provisional stop-gap measure to help farm growers address acute labour shortages, foreign workers are now often considered to be a structural necessity for the industry by many in the agricultural business community (Basok, 2002). More recently, however, the use of such workers has not only increased in scale, but is now also beginning to ‘creep’ into other sectors of the post-domestic economy as well, including most notably, in oil sands resource extraction, construction, food processing and meat packing. Researchers note the appeal of foreign workers stems from their restricted placement in the labour market, often tying the condition of employment to a single employer, thereby providing capital with a secure, reliable and highly controlled supply of labour (Satzewich, 1991; Basok, 2002; Preibisch, 2004). Research findings from this study provides compelling evidence to suggest heightened interest among major community employers to tap into and take advantage of this emergent pool of captive labour. For example, one human resource director at a food-processing plant explained how they were currently in the processes of applying to the government for access to foreign workers and remarked: We’re aware many area farmers have had success bringing over offshore workers from Mexico and Jamaica y We haven’t done this before, and are still not sure what to expect, but we’ve applied and want to get that option to work here too. We want to secure the help we need to staff our plant during the peak summer months, when everybody wants to go on vacation.

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Another plant manager at a food-processing plant captures a common sentiment shared by many small town employers noting: We started getting offshore workers to work on our farms back in 1988. They’ve worked out great for us, and they come back to us year after year. We’ve got 60 of them right now on our farms and another 10 or so helping out in the plant when we need it. We’re looking to get more but the Canadian First Policy makes it difficult to y. We pay a premium for these workers cause we have to cover housing and transportation costs. But this is the best source of labour for us because we get the reliability were looking for y the 24/7 factor we need to process perishable crops.

Among employers surveyed, the use of foreign contract workers was most prevalent among agri-food processors and produce packaging firms seeking to satisfy the demand for fluctuating general labour needs. These employers, who provided the lowest rates of remuneration, expressed a clear preference for hiring TFWs given that these individuals were generally seen to provide the highly sought after 24/7 advantage – that is to say, availability 24 hours a day, 7 days a week – a common euphemism used in the industry that also indicates the extent to which these workers are driven to work hard and are unlikely to question management’s prerogatives, unlike their Canadian counterparts who were often said to be ‘choosier’ and much more unreliable. It was common for small town employers and some municipal officials to raise concerns about the inadequacy of the local labour supply and the need to secure a more reliable workforce to help ensure future economic competitiveness. Attracting new flows of im/migration labour to the community, or sourcing foreign contract workers, was generally regarded as the most viable option to addressing these sorts of concerns. Yet others in the community well positioned to comment on the severity of the local labour shortage often highlighted a contrasting point-of-view. When asked to comment on the situation, a plant foreman at a food-packaging firm, who happened to be an immigrant of Italian origin, replied rather frankly: There’s no shortage of labour here y there’s never any shortage of getting labour. I hear that sometimes and I also hear some immigrants have a hard time getting a job because of language skills. You really don’t need to know a language to work on the line, just know how to follow orders. You’re told what needs to be done. You’re just picking and packing cold carrots, right. You’re doing it day after day, it’s very repetitious.

From another dissenting perspective, community employment counselors tended to note that the bulk of their clients consisted mostly of new Canadians from a diverse spectrum of ethno-cultural backgrounds, and that these individuals encountered significant difficulties securing full-time and

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long-term employment options in the communities under study. This point was emphasized when an employment director at the local employment resource centre said: Well, I would say back in the 1990s, it was a lot easier to find a permanent fulltime job. Now a lot of people, regardless of their background or education level end up with contract work on a temporary basis y. The only trend I see in the local labour market is a shift towards short term contract work y. We deal with a lot of new Canadians tying to find jobs, but the situation is difficult for everyone. We offer ESL [English as a Second Language] classes to help overcome language barriers, and to teach people how to build their resumes. But without Canadian work experience or knowing the right contacts, it’s very difficult to find a job. Finding a job these days is hard for anyone, regardless of background. Outside the hidden job market, I only see temporary opportunities available.

Another employment counselor put it this way: There’s certainly a shortage of workers in this community y [pause] y for us though, I would say there’s a shortage of jobs for the people who are looking for work, mostly because we deal with individuals who for whatever reason, can’t find work.

These views provide an important counterpoint to suggestions claiming that small town labour markets are in the midst of a labour crisis, and that concerted efforts are needed to help provide firms with an adequate supply of workers. The trend towards sourcing ever greater numbers of TFWs amid mounting concerns of unemployment and underemployment, especially among new Canadians, helps confirm what many scholars have long argued is an increased reliance by employers on contingent workers and ‘unfree’ labour practices currently becoming commonplace with the emergence of post-Fordist systems of production (Satzewich, 1991; Basok, 2002; Winson & Leach, 2002; Yates & Leach, 2007). For its part, the Federal government’s recent expansion and redefinition of the TFWP, I would argue further, is tantamount to a rethinking of immigration policy within the Canadian context, and does in fact reflect the state’s role in facilitating a broader socio-economic transformation and the adoption of more regressive postdomestic labour-market management practices. Precarious Work Arrangements Another major theme to emerge from this research is the rapid proliferation of non-standard work arrangements in all sectors of the economy. Non-standard employment refers to jobs that are casual, part-time or temporary in nature. These positions typically offer lower wages and fewer

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opportunities for skill development and career advancement. While often justified as a means to provide greater ‘flexibility’ to both employers and employees, recent Canadian studies call attention how im/migrants, ethnic minorities, women, youth, the less educated and lower skilled workers are becoming increasingly trapped in these precarious employment arrangements (Winson & Leach, 2002; Stanford & Vosko, 2004; Yates & Leach, 2007). Casual and temporary jobs were once most common in agriculture and the service sector; however, evidence from this study supports the position that they are becoming a new reality in all occupations, including within the automotive manufacturing sector, once considered a bastion of well-paying, full-time jobs. Consider, for instance, that the auto-parts manufactures interviewed reported that anywhere from 35 to 50% of their workforce is now recruited directly through temporary staffing agencies. For today’s new entrant to the labour market, securing fulltime and permanent work has already become the exception rather than the rule. The recent explosion in the number of ‘temping’ firms servicing communities across south-western Ontario is testimony to the pervasiveness of this unfolding trend. Temping has become big business in small town Ontario. An employment counselor at a government funded employment bureau remarked with some frustration that the number of job seekers coming to his/her office has ‘declined sharply in the last number of years’, and went on to note that ‘most job hunters nowadays look to temp firms to find work rather than the government job bank’. An executive director of a private staffing agency interviewed for this study explains the rising popularity of temping as follows: One of the appealing features that we are able to offer our clients, instead of the traditional route of in-house recruitment, is that the new hire becomes [our] burden and responsibility, rather then the clients. So we deal with everything from recruitment to workplace safety issues, insurance, training and all the other administrative work that goes with staffing. It’s a win-win situation for all involved. It allows the employee to see if they’re a fit for a possible future permanent opportunity at the place of business, and gives our clients a lengthier time to watch somebody’s work ethic, reliability and skill level without having to make any commitments. We do all the disciplining! If a new hire is not working out, or isn’t a suitable fit with our client, we take care of those sorts of matters, and if need be, simply put an end to the work assignment. Also, from the client’s perspective, if they need an additional labour supply but are uncertain as to how long they’re going to need this increased labour force, we can bring in new staff without the client assuming any permanent responsibility for this workforce. It then makes it much easier for our clients to be able to trim down their labour force during a downturn in their business cycle.

Private staffing agencies reflect a key labour-market institution that is now primarily responsible for connecting a large segment of the Canadian

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working population to available job opportunities. Winson and Leach (2002) describe how the ‘stable work world’ once characteristic of the Fordist model of development has as a consequence of recent economic restructuring given way to a new world of ‘contingent work’. Similarly, Stanford and Vosko (2004) emphasize how capital has managed successfully to reimpose a business orientated agenda in capital/labour relations within the economy and foster a climate of ‘permanent insecurity’ among workers. The rapid proliferation of temping firms and their rising influence in local labour markets noted in this study should be considered against this backdrop. Temp agencies, who arguably serve the interests of capital rather than labour, allow firms to limit responsibilities and liabilities when managing their workforce, while trapping employees into an uncertain cycle of short-term work arrangements. Analysis of the community case studies also reveals that those most affected by the new reality of contingent work, not surprisingly, are new entrants to the labour force, which of course disproportionately impacts young people and new Canadians alike. In fact, I would argue it is these vulnerable segments of the labour force that are bearing brunt of postFordist adjustment. New Canadians are at a particular disadvantage since they are most likely to lack an effective local social-support network to help mitigate against the challenges of economic hardship and exclusion. This finding has an important implication for the long-term sustainability of communities grappling with de-population, youth out-migration and removing the barriers to social inclusion. Without an employment base capable of allowing hardworking individuals the ability to secure sustainable livelihoods, communities cannot flourish and those living on the edges of mainstream society will be compelled to eke-out a marginal existence. Evidence from this research study cautions against making any optimistic assessments of the economic health and vitality of many small towns in south-western Ontario, especially those that are based solely on the quantity rather than quality of job creation figures. The existence of a large and growing pool of contingent workers is worrisome because it increases the vulnerability of households and communities to unforeseen shocks, the problems of which are only compounded during an economic downturn. For the most part, the various levels of government have done more to facilitate the emergence of post-Fordist labour markets than implement measures that would protect citizens and workers from declining living standards and more exploitative work arrangements, including for instance: expanding and normalizing programs to recruit foreign workers on a temporary basis; incentivizing and subsidizing spatially mobile industries to

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relocate in order to take advantage of less regulated regions; weakening labour laws and standards; and, diverting public services and investment away from local communities. Without a major change in the direction of government policy, along with a shift away from the growing dependence on contingent workers as a strategy to enhance competitiveness, sustainable community development cannot be addressed, let alone pursued.

Trying to Find a Job, Working Hard to Make a Living Immigrant Canadians interviewed for this research were found to confront numerous difficulties when attempting to get established in their new homeland. Although many of these respondents did in fact find work in the case-study communities, many commuted from nearby urban centres and felt, given the insecure nature of their jobs, that it would not be a good idea to relocate altogether. As two respondents reported: I can’t move here right now. I live in [near-by city] with my wife, children and my two brothers; we all share a house together. I’ve been here for almost three years now, worked six different jobs, but have not yet found secure year round employment. I do like this community, but right now thinking about moving is just not possible. Although I work here in [small town Ontario] I actually live in [nearby city] with my wife and her sister and husband. They really helped us a lot when we arrived from Iran [via] Kazakhstan. This is my fourth job in less than two years. My wife works part-time in a grocery store. Neither of us have been able to find work in our fields. I’d be willing to move wherever and call it home so long as I can find a job good enough to support my family.

Finding year-long full-time employment was singled out as the most important concern facing new Canadians. Among those interviewed, it took on average a year-and-a-half to land their first full-time job opportunity, although this in itself did not necessarily guarantee secure long-term employment. Only 10% of those questioned said they had found secure fulltime employment, while the clear majority stated that they were either working various low-end jobs to make ends meet, or currently trying to find additional employment. These findings underscore the limitations inherent to aggregated statistical indicators like the official unemployment rate, which masks the precarious employment situations of those working at the low end of the job market, and consequently, underestimates the actually degree of economic hardship taking place in communities.

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Limited and unsustainable job opportunities compel new entrants in the labour market to adopt creative and often enduring survival strategies ‘just to get by’. Research by Coˆte´ and Allahar (1994) indicates how young people have become economically marginalized in the new economy, with the most privileged having their parents subsidize the transition to independent adulthood. Those less privileged, take up whatever unstable short-term jobs exist, continue or return to post-secondary education with the hopes of improving the chances for gaining employment, or in the worst case scenarios, drift into a life of marginality and criminality. Data from this study indicates that new Canadians are very much reliant upon kinship relations and the cultural capital of their ‘ethnic communities’ in order to cope with today’s harsh economic realities. Community leaders, municipal officials and employer representatives interviewed often mentioned they were interested to attract new flows of im/migrant labour for resettlement, but found it both difficult and frustrating that new Canadians did not seem interested to take up this call. Part of the motivation driving the push to source greater numbers of foreign contract workers is a widespread perception that young people no longer desire to remain in small towns and new Canadians demonstrate a clear reluctance to move outside ‘ethnic enclaves’, which are usually located in larger urban centres. Temporary employment contracts that tie a foreign worker to a single employer are seen to overcome this challenge since ‘guest workers’ are channelled into regions of need and prohibited from freely circulating in the labour market, thus prevented from ‘trying to better-deal their situation after arriving in this country’. This understanding of im/migration resettlement dynamics and sociocultural adjustment processes, however, is challenged by the viewpoints expressed by recent newcomers. For the majority of new Canadians questioned, sharing accommodation with relatives and wanting to live in close proximity to other members of their ethno-cultural community was generally considered to be an important livelihood survival strategy, not just a lifestyle preference. As one Indo-Canadian woman explained to me, ‘[i]f I need a job, I ask around my apartment building who’s hiring?’ Several of the respondents likened their ‘ethnically rich’ apartment buildings to a quasiemployment resource centre. Others noted that by sharing housing arrangements with members of their extended family, they could cut down on expenses and deal with job loss during hard times, or begin building up some savings in anticipation of better times. Given the high degree of reliance on familial and informal community support systems found among new Canadians, it is not entirely surprising such individuals came to express

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a reluctance to severe these ties and relocate to other places in search of employment opportunities, especially given the structural instability characteristic of today’s post-Fordist labour market. These informal social networks reflect the most accessible social safety net and peer group available to immigrants when they arrive in Canada. New Canadians interviewed often articulated a complex and contradictory sense of hope and despair, which I would suggest is indicative of a more generalizable sentiment prevalent among im/migrants, and perhaps to a lesser extent, their decedents as well. The following excerpts help illustrate this feeling: [Immigrating] is difficultyyou are dealing with a different society and a different mentality, and a different value system. Obviously because you want to provide a better life for your family and kids, but I’m not sure ...[pause] ... I’m not 100% convinced that’s the case. Working 50 hours a week and being away from my family, and having my kids being raised by strangers is providing them a better life? All we do is just get by, the amount of money we’re making is just enough to live off it. We have no savings. We have no credit card debt but basically we’re living pay cheque to pay cheque. Nobody wants to leave their country for no good reason y. Life is difficult and moving to Canada was not easy. I’m Canadian now, and I hope my daughters and son will have a better life. Finding work in Canada is not easy, and I don’t know good English. I deliver newspapers, work in Factory, do anything I can to make moneyyI work lots of hoursy.Work nights and days, work 48 hours a week sometimes. I thought life in Canada would be better and I could take advantage of good opportunities to get ahead. But it’s been very difficult for me and my family. My expectations were completely off, probably because of my naivety. It wasn’t cultural shock as much as it was a slap in the face, or a wake-up call.

Immigrants, like other vulnerable segments of the working population, have been hard pressed in the aftermath of post-Fordist restructuring. Under the guise of enhancing ‘flexibility’, good jobs are now a scarce commodity while structurally unstable employment has become the ‘new reality’ for many job seekers. In this respect, rural and small Ontario appears just as susceptible to broader shifts in the global political economy as its more urbanized neighbours. This study calls attention to how im/ migrants are making up a disproportionate share of those filling these lessthan-desirable positions in rural and small town Ontario, and suggests that a combination of economic compulsion and their outsider status works to place and keep these individuals at the lowest echelons of the labour market. Despite exhibiting a strong work ethic and a desire to improve their life

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situations, there is compelling evidence indicating that new and non-status Canadians are swelling the ranks of the working poor. The main implication to be drawn here is that increased economic marginalization goes a long way explaining recent concerns with the lack of socio-cultural integration taking place within Canada’s multicultural society.

‘Workin on the Go’: Transnational Capital/Labour Flows in a Not-So-Globalized-World Scholars point out a defining feature to the current global restructuring of economic processes is the spatial and temporal reorganization of the relations of production between capital and labour in a quest to restore class power (Sassen, 1998; Bonanno, 2000; Harvey, 2006). The end goal of this project is to provide greater ‘flexibility’ for capital by promoting a business climate generally more conducive to renewed capitalist accumulation, regardless of the consequences for community or sustainability. The freeingup of capital to seek out the most advantageous localities imposes a disciplining logic that punishes regions with higher costs and standards of regulation, and would appear to reward lower cost, less regulated communities who desire economic development. The ascendency of a more cut-throat economic paradigm has had a noticeably corrosive impact on the structure of employment in high-income countries. In the Canadian context, for instance, recent studies call attention to a shift away from a world of stable full-time employment and the proliferation of unstable, contingent jobs as firms look to reduce labour costs and become more competitive in the global marketplace (Winson & Leach, 2002; Stanford & Vosko, 2004; Shalla & Clement, 2007). As working conditions deteriorate in the developed north, strategic state intervention in the regulation of labour markets has helped mainstream Canadian society avoid the brunt of postFordist adjustment. The incorporation of new flows of transnationalized im/ migrant labour appears to play a pivotal role facilitating the adoption of a more exclusionary model of economic development. As new entrants to the labour market, immigrants are often compelled by necessity to work whatever job opportunities exist, regardless of their skill level or qualifications, with the hopes of improving prospects over time. For foreign workers who are temporarily contracted to take up jobs in an expanding range of industries, the situation is even more clear-cut. While permitted to enter the country and do apparently unwanted jobs, these same workers are placed and kept at bottom end of the occupational ladder by being

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prohibited from acquiring full citizenship rights, freely circulating in the labour market, qualifying for merit-based promotions or given the option to reside on a more permanent basis once making an important contribution to the Canadian economy. Given their ascribed outsider status and subordinated legal standing, it is a vulnerable workforce subjected to a lower standard of working conditions and subtlety denied options for upward socio-economic mobility. Research findings discussed here highlight a significant amount of job creation taking place in smaller, rurban communities adjacent to major centres like the GTA, Hamilton, London, the Tri-City and Windsor, mainly as a result of im/migrating manufacturing firms looking to capitalize on the rural edge in the global era. Partially as a result of this trend, many small town employers were also found to be experiencing difficulty filling job vacancies at all skill levels; however, the situation appears to be most problematic for the least desirable and lowest paying occupations in the local labour market. Although the Canadian state looked historically to permanent immigrant resettlement as the main strategy to address regional labour needs, this study brings to light an increased reliance on an underclass of contingent, transnationally mobile im/ migrant workers who either commute to workplaces from nearby urban cities, or are legally required to return to their country of origin upon completion of work-stays. Within the agri-food sector, where margins tend to be thinner and demand for labour seasonal, employers demonstrate a clear preference for hiring temporary foreign contract workers as an alternative to recruitment through traditional immigration channels. Ontario’s rural and small town communities no longer seem capable of offering new incoming flows of im/ migrant workers the means or opportunity to become fully incorporated into local community life. John A. Porter (1965), one of Canada’s most renowned sociologists, challenged back in the mid-1960s, the image of Canada as a classless society with relatively few barriers to social mobility, introducing his famous metaphor of a vertical mosaic to describe social stratification and the well-established pecking order that was very much part of the Canadian establishment. Four decades afterwards, it would appear that the situation has worsened considerably and the quintessential Canadian preoccupations for social equality and the pursuit of a ‘just society’ are quickly becoming a distant memory, as much of the contemporary Canadian ‘cultural mosaic’ in now being built with highly contingent workers and ‘in-sourced’ foreign contract labour, vulnerable pieces all too easily pushed aside and discarded from the mainstream of society’s social fabric. A major conclusion to be drawn from the study is that while rural and small town communities in south-western Ontario have managed some

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degree of success courting new transnational capital investment flows, such growth is not being dealt with in a sustainable or equitable manner. A clear indication of this trend can be inferred from the quality of jobs created, which for the most part were found to be structurally unstable and offer lower wages when compared to similar occupations in nearby urban centres. Precarious jobs with leaner paychecks are not a long-term solution to the employment challenges faced by many of these smaller communities, and not surprisingly, tend to attract only the most vulnerable workers in the labour market. These sorts of jobs breed social exclusion since workers are not provided with the financial wherewithal necessary to prosper and become more permanently established in their communities-of-work. Rather, these individuals are part of an emerging transient migratory labour force compelled to adopt a semi-nomadic livelihood strategy in order to sustain households. Despite encouraging job creation figures at first glance, this study calls attention to the contingent nature of such occupations. As Winson and Leach (2002) warn, contingent work must be seen as a threat to long-term community sustainability and a harbinger of eventual decline. The vast majority of jobs created in the community case studies examined here are ones that are contractually limited, part-time, seasonally variable, periodically subject to downturns and offering wage rates at or slightly above the national minimum, hardly the kind of stable employment necessary to adequately sustain families and communities. It was also found that new Canadians, TFWs, women, young people and other marginalized segments of the population make up a disproportionate share of this highly vulnerable workforce. Given that im/migrant workers in particular are more likely to tolerate higher rates of exploitation and marginalization since they are often in a position less able to articulate discontent, this research also raises concerns about the underlying economic conditions that have a direct bearing on the social integration of new Canadians. With foreign contract workers, the situation is even more unsustainable, as the costs of social reproduction and maintenance – for example, education and health care – are externalized and imposed entirely upon the families and societies left out of the economic arrangement. Consequently, this research notes the importance of a social analysis which can account for intersectionality, exploring the complex ways in which multiple bases of disadvantage – class, race, ethnicity, gender, age, citizenship status, etc – structure social relations in local communities and how these social processes impact the wider political economy. While evidence from this study confirms the growing influence of globalizing capital/labour flows, it also brings to light how the state retains

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an important function regulating local social processes. The deliberate segmentation of the Canadian labour market, which, as I have argued, serves to impose a new standard of discipline in the workplace, reflects an important site of statist regulation clearly favouring the interests of capital over labour. Although neo-liberal advocates of globalization often applaud the desirability of a minimalist state, current conditions for capitalist accumulation necessitate the need for more stringent government intervention to help enforce a new spatial division of labour. This apparent contradiction is fundamental to the success of the post-Fordist model. It explains how capital can claim a shortage of labour and the need for statesponsored labour ‘mobility’ initiatives on the one hand, and then turn around and dismiss other calls for public policies addressing the pending crisis of stable employment as market interference on the other. The relationship between capital and the state in the global era is far more complex and symbiotic than the view often presented by laissez-faire advocates (Schwartz, 1994). Capital’s unabashedly self-serving propensity for selectivism and unrepentant willingness to work with government helps substantiate David Harvey’s (2006, p. 27) claim that ‘[t]he neo-liberal state is profoundly anti-democratic, even as it frequently seeks to disguise this fact’. The research discussed here helps support the position that globalization should not be taken as a single, coherent process of socio-spatial integration, but rather understood as a geo-political strategy pursued by highly motivated economic actors to redefine and circumnavigate the rule of law within and between nation-states, the outcome of which is partial, contradictory and heavily skewed in favour of the interests of capital at the expensive of labour.

CONCLUSIONS The research findings and analysis explored in this chapter point to a growing gap between rural employment opportunities and the conditions required for social inclusion and long-term societal wellbeing. These circumstances raise important questions regarding how we go about understanding the relationship between capital flows, job creation and economic growth on the one hand, and labour flows, im/migrant resettlement patterns and the basis for sustainable community development on the other. While it could be said that capital has been liberated within the present globalizing economic order, labour and community are found to be much more constrained by the impediments of place, which is in fact

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sanctioned by restrictive government polices that serve an important gatekeeper function. The desire to unleash market forces and cut red tape, despite pretentions otherwise, has not prevented capital from calling upon the state to enact heavy-handed and costly policy initiatives regulations if it works to its advantage. The increased policing of socio-spatial boundaries in a supposed era of globalization, undermines what economists would call the free functioning of market forces, and reflects a key feature of the neo-liberal economic order warranting further investigation. It has fundamentally altered the rules of the game structuring the relationship between capital and labour in this not-so-globalized-world, redefining who belongs, and who does not, from communities-of-work. As A. Bonanno (2000, p. 321) contends, ‘the fracture of the spatial unity between community and the state’ not only serves to limit democratic representation, but it also renders the basic understanding of a legitimate political community problematic. Critically orientated social-science researchers are well advised to abandon conceptual tools and categories that assume normalcy and coherency, and begin theorizing new analytic methods better suited to comprehend account for complexity, selectivity, inconsistency and semiotic ruptures. This discussion also has direct relevance to local community leaders and municipal planners who must begin to think about, and devise ways to deal with, the social consequences of a growing world of contingent work and increased ethno-racial segmentation within rural and small town labour markets. Without equitable standards of employment, fair remuneration and advancement opportunities for all those working at the bottom end of the labour hierarchy, communities cannot develop in an inclusive and sustainable direction, and will surely begin to undergo disintegration, increased marginalization and decline as a consequence. Rurban communities subject to bifurcating pressures of industrial sprawl and declining livelihoods are especially vulnerable to falling into the trap of looking to attract capital investment at any cost, as bad jobs will always seem to be preferable to the prospect of no jobs at all. Left on their own accord smaller communities are poorly positioned to confront the incessant demands of a globalizing economy and therefore it would be prudent for local stakeholders to consider ways to organize with neighbouring municipalities from below in order to reduce the incentives for jurisdictional shopping from above. There is ample evidence from the Canadian context that effective government leadership in local economic planning and development, has in the past, provided a positive counter-influence offsetting problems associated with uneven development and destructive market tendencies. The presence of a strong and publicly minded government can

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help stimulate employment opportunities by investing in sustainable community infrastructure projects, incentivizing economic diversification and providing the skills and training necessary for those eager to develop potentials, and by doing so, help minimize regional economic and social disparities. Unfortunately, this course of action is no longer seen to be in vogue and stands at odds with today’s neo-liberal orthodoxy which places blind faith in market-orientated solutions, despite mounting evidence suggesting this is more a matter of rhetoric than reality. If communities like Strathroy, Tillsonburg and Bradford are to develop in a more socially sustainable direction, attention must be paid not just to courting new flows of capital investment, but also to ensuring that those who work and contribute to the local community are given opportunities to grow and develop as well. This research identifies the pressing need for more equitable and effective public policy efforts better suited to integrate incoming flows of im/migrant labour into exiting community structures and social life. Such a call for change, however, requires that steps be taken to transition the economy away from an exclusionary model of development predicated upon the deliberate creation of marginality, and necessitates that Canada’s multicultural state does not become redefined so as to exclude those who take up the most enduring and often least rewarding occupations. Without a significant reorientation and enhanced role for public planning that ensures opportunities for inclusive and equitable participation for all in the economy, the ascendancy of post-Fordist labour markets will continue to corrode the ties the bind individuals together and make communities susceptible to the various social ills and repercussions that surely follow from a more marginal socio-economic existence.

NOTES 1. President Franklin D. Roosevelt’s ‘New Deal’ (1933–1945) platform reflects an early political manifestation that is ideologically linked to this governmental approach of promoting capital–labour accommodation and internal development, which was to provoke various subsequent waves of reactionary backlash (Biles, 1991). 2. This very conservative figure is calculated from data compiled by Industry Canada and refers only to jobs created by tier 1 automotive component manufacturers. 3. It is worth mentioning here that the Government of Ontario’s 2005 Greenbelt initiative is a recent public policy effort intended to address the problem of residential and industrial sprawl taking place in and around the Greater Toronto Area (GTA).

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4. The data that informs section headings is derived from numerous sources, including two research projects where I am a co-investigator (Leach, Leadbetter, Preibisch, Sousa, & Yates 2007; Leach & Sousa, 2005). Discussion and analysis is also based on a critical examination of existing scholarly research looking at immigration, labour market, and economic trends and issues from the North American perspective. Various archival materials including municipal documents, internal social-service reports and local news paper articles were also reviewed. Drawing upon quantitative data published by Statistics Canada and the Province of Ontario, a statistical portrait and labour-market profile were constructed for 20 different communities in southwestern Ontario, with careful attention paid to ensuring each of the county divisions were represented in the initial selection. From here, Strathroy, Bradford and Tillsonburg were identified for further in-depth study on the basis of their geographic proximity to urban centers, location to major transportation corridors and the representation of both agri-food and industrial employers in the local economy. These three case studies can be considered representative of many small communities across the region sharing similar place-based attributes. Extensive semi-structured interviews were undertaken during four separate phases between 2004 and 2007, and are discussed in a greater detail below. The research sample targeted municipal officials, social-service providers, major private sector employers and recent im/migrant workers. In total, 45 interviews were carried out during this period. All research subjects provided informed consent while conversations were recorded and later transcribed verbatim. These transcripts were then used for analysis employing conventional qualitative procedures in the social sciences. Other standard community fieldwork techniques were also utilized including site visits to communities, industrial plants, food processing facilities and local farms. 5. These findings are parallel to statistical research undertaken by Di Biase and Bauder (2006) who found that less than 5% of recent permanent immigrants are choosing to settle outside urban centers. 6. Once restricted to farm workers and live-in domestic caregivers in Canada, a wider base of employers are now eligible to apply to Human Resources and Social Development Canada (HRSDC) in order to gain access and hire large numbers of foreign workers on a non-permanent basis through the Temporary Foreign Workers Program (TFWP), which was established in 2003. To do this, an employer needs to acquire a positive Labour Market Opinion (LMO) rating from the ministry by demonstrating efforts were made to recruit Canadian citizens/permanent residents; wage rates are consistent with the ‘going rate’; working conditions meet current provincial standards; and/or the possibility for further job creation and skills transfer. At present, only skilled trades people may be subsequently considered for permanent resettlement.

ACKNOWLEDGEMENTS I would like to thank the co-investigators – Belinda Leach, Kerry Preibisch, Aine Leadbetter and Charlotte Yates – for access to the research data, and

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for their helpful comments and insights on previous drafts. I also acknowledge the many discussions among members of the research team that have contributed to this analysis. I would also like to acknowledge a previous study funded by the OMAFRA/University of Guelph research program entitled ‘The Automotive Parts Industry and Rural Community Sustainability: Production and Livelihoods on the Move’ (Leach and Sousa (2005)), for which data and analysis contributes to this work as well. I would like to express my appreciation to Belinda Leach, Alessandro Bonanno and the anonymous reviewers.

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CHAPTER 5 FREE TRADE OF COFFEE, EXODUS OF COFFEE WORKERS: THE CASE OF THE SOUTHERN MEXICAN BORDER REGION OF THE STATE OF CHIAPAS Marie-Christine Renard ABSTRACT This chapter presents the case of the coffee-growing region located in the southern portion of the state of Chiapas, along the Guatemalan border. This region was relatively prosperous until the 1980s, thanks in part to price support programs established through international coffee agreements. A short supply of labor attracted farm workers from adjacent regions. These were seasonal, undocumented workers who arrived from Guatemala and whose status of illegal immigrants fostered their exploitation. The liberalization of the international coffee market combined with a sharply reduced state intervention engendered the control over coffee production by a few transnational companies and the collapse of the economy of small producers. Combined with natural disasters whose effects were not addressed by the neoliberal state, this situation caused the region to be bypassed by Guatemalan labor that now prefers direct Globalization and the Time–Space Reorganization: Capital Mobility in Agriculture and Food in the Americas Research in Rural Sociology and Development, Volume 17, 147–165 Copyright r 2011 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1057-1922/doi:10.1108/S1057-1922(2011)0000017008

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migration to the United States. This region also has been transformed into an increasingly underdeveloped area affected by outmigration. Chiapas has become a long vertical border for undocumented Central American workers as Mexican migration policy has toughened following the establishment of the US national security policy. In this sense, there is a stark contrast between the mobility of financial and commercial capital and the ease with which both move in and out from the region, and the obstacles imposed on labor mobility.

INTRODUCTION One of the major objectives of neoliberalism consists of freeing capitalism from restrictions that are viewed as hampering its growth (Harvey, 2005). Accordingly, it can be seen as an effort to eliminate limitations on the mobility of capital and increase its flexibility (Bonanno et al., 1994). In this context, globalization can be defined as the recomposition of production and consumption processes beyond national borders, with the purpose of avoiding nation-state-based regulations that increase production costs and limit the scope of action of capital (Marsden & Arce, 1993). It responds to the corporate strategy that seeks to cut costs by accessing cheaper production factors and avoiding public regulations in the spheres of labor, environment, and tax and tariff. The search for cheaper factors of production takes place following a variety of established patterns. In some instances, companies relocate in regions where workers are poorly paid and poorly protected by local and national legislation. In other instances, workers might migrate from these low-wage regions toward more developed countries. This is often the result of the application of neoliberal models that disarticulate local economies by opening trade and allowing unequal competition (Rubio, 2007). Finally, corporations spatially diversify their supply sources, allowing the possibility for the substitution of one supply source for another. This is a phenomenon known as global sourcing. Corporations, therefore, place producers in a market-competition situation subjecting them to corporateimposed conditions and prices (Bonanno, 2006; Friedmann & McMichael, 1989; Friedmann, 1991; Constance & Heffernan, 1991). Transnational companies look for favorable spaces and better conditions for their expansion and are unconcerned with the negative consequences that they engender locally (Carral, 2006). In the agricultural sector, the effect of liberalization has been the impoverishment of small producers and their expulsion from productive activities due to their inability to compete.

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The devaluation of their products disarticulates the agriculture of entire regions of less developed countries. It generates unemployment that translates into wage reduction and enhanced competition in the international sphere where this labor force tends to be displaced (Rubio, 2007). Vast rural areas are left in a state of abandonment due to the fact that they are no longer desirable sites for investments (Carral, 2006). One of the objectives of the North American regional economic integration has been to guarantee access to cheap and high-quality labor in Mexico through the relocation of some industrial segments (e.g., in the maquiladoras) and to provide undocumented and cheap labor to the United States. On the one hand, in the United States the presence of a large migrant labor force is advantageous to firms due to the lack of low-paid workers in the domestic labor market and the desirability of lower production costs to better compete in the international market. On the other hand, Mexico has a labor surplus that satisfies the United States’ demand. This surplus labor pool is a direct consequence of the uncompromising application of neoliberal policies in the countryside (Aragone´s, 2004). In this context, the Mexico–United States border has been transformed into the greatest immigration corridor in the world, and Mexico is the third largest world recipient of remittances after India and China (World Bank, Migration and Remittances Factbook, 2007).1 The price of trade opening has been the emigration to the north of half a million Mexicans each year; Mexican immigrants to the United States have been predominantly agricultural and low or unskilled workers (Massey & Sana, 2003). While capital – particularly financial and speculative capital – achieved a very high level of mobility, the same cannot be said of labor, whose freedom of movement is much more limited. This is particularly true for unskilled workers who attempt clandestine immigration to developed countries (Belo Moreira, 2001). The apparent contradiction of the North American Free Trade Agreement (NAFTA) consists in the fact that while trade has been liberalized, immigration policy has been tightened in order to control immigration to the United States by traditional campesino farmers affected by said trade opening (Villafuerte, 2008). The restrictions on immigration push immigrants ‘‘underground’’ to the status of undocumented and make them an easily exploitable labor force (Harvey, 2005). Control over this immigrant labor force no longer depends on the market (an existing but not always recognized demand) but rather on the legal sphere (the undocumented transformed into illegal), leaving these workers with a much reduced ability to claim better labor and wage conditions (see Introduction, this volume). The vulnerability of undocumented workers also means downward pressure on wages of the domestic workforce (Carral, 2006).

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The case studied in this chapter is that of a coffee-growing region located in the southern portion of the state of Chiapas, along the Guatemalan border. This coffee region was relatively prosperous until the 1980s, thanks in part to price guarantees established through international coffee agreements. There was no surplus of labor; in fact, the opposite was the case. It attracted farm wage workers for the coffee plantations. In our case, these workers were seasonal indigenous migrants who arrived from Guatemala and whose condition as undocumented foreigners allowed their exploitation. We will see how liberalization of the international coffee market, combined with state withdrawal from intervention in the coffee sector, engendered the control over coffee production by a few transnational companies and the collapse of the economy of small producers. Combined with natural disasters whose effects were not addressed by the neoliberal state, this situation caused the region to be bypassed by Guatemalan labor that now prefers to reach the United States. This region also has been transformed into an increasingly excluded area affected by outmigration to the point that Chiapas migrants occupy one of the first places in deaths along the northern Mexican border (Villafuerte, 2008; Lo´pez Are´valo, 2007). We will also see how Chiapas (as all of Mexico) has become a long vertical border for undocumented Central American workers as Mexican migration policy has toughened following the establishment of the US national security policy. In this sense, there is a stark contrast between the mobility of financial and commercial capital and the ease with which both come and go from the region, and the obstacles imposed on labor mobility.

A Prosperous Economy Based on Emigration The border between Chiapas and Guatemala is relatively long, stretching for 658 km. Soconusco and Sierra Madre regions are located in this region’s southern part near the Pacific Ocean. Since its colonization and early economic development in the late 19th century, the history of southern Chiapas has been a history of emigration. This border strip with Guatemala developed around the expansion of coffee, a labor-intensive export crop financed by foreign capital, primarily German but also British and American (Spenser, 1988; Von Mentz, 1988; Seargent, 1980; Helbig, 1964). Immigrants were the early colonists who broke ground for the first plantations, and immigrants also formed the workforce – sometimes virtual slave labor – that planted, cultivated, and harvested crops. Immigrant labor from the surrounding regions provided the necessary manpower to develop the plantations

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and the agricultural economy of this entire region over the course of a century. For many years, this labor was made up by indigenous workers from the mountainous region of Chiapas (Los Altos). They arrived to the coffee plantations ‘‘hooked in’’ through debts and alcohol by unscrupulous recruiters at the service of plantation owners. The latter found in the cheap and abundant labor force from the mountains an answer to the tight conditions of the local labor market (Baumann, 1983; Pohlenz, 1994; Re´bora, 1982; Ponce, 1985). Labor from Los Altos was available until the 1940s. At that time, indigenous workers were allotted plots in their own areas of origin and became decreasingly available for wage labor in the coffee fields. They were gradually replaced by indigenous workers from the high region of Guatemala. These workers migrated on a seasonal basis and were willing to accept very low wages that, however, could not be obtained in their own country. In a few years, this flow of immigrants became indispensable for the agriculture of the entire region (Spenser, 1988). In the 1970s and 1980s, the intensification of traditional crops – such as coffee – and the expansion of others – such as banana, sugarcane, and mango – increased the demand for labor from Guatemala while persisting poverty worked as a push factor for this seasonal immigration (Renard, 1992). This situation evolved in a context in which local workers have not been historically inclined to accept employment in the plantations. Workers who had common-property farms (or ejidos), and small coffee producers needed to work on their plots and could not be available for wage work. This was particularly the case during key periods of the season, such as at harvest time, when family labor was insufficient. Also, large farm and plantation owners have been reluctant to hire local labor as a result of unresolved old antagonisms dating back to 19th-century social struggles (Renard, 1993). Additionally, the poor labor conditions and wages offered for the very heavy work remain unacceptable to these local workers. The Mexican government regulated the sector only in the 1980s when it decided to control the across-the-border flow of workers. Until then, workers had been traveling freely between Guatemala and Mexico as the border itself was a relatively recent entity for the people of the region.2 Motivated by the presence of refugees from the civil war in Guatemala, immigration authorities began to issue permits that allowed workers to enter Chiapas and remain in the country for a period ranging from 30 to 60 days (A´ngeles, 1999). Later, in 1997, a new immigration program was implemented, the Migratory Authorization for Agricultural Visitors (Forma Migratoria para Visitantes Agrı´colas – FMVA). It allowed entry to the country for up to one year, but it was limited just to the state of Chiapas.

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Public regulation attempts, however, did not eliminate the old and exploitative recruitment mechanisms typical of the late 19th century. At the beginning of the new millennium, the majority of workers (76% in 2000) continued to be hired by recruiters working for plantation owners (A´ngeles, 1999). This is a situation that continued even as new legislation allowed foreign nationals to obtain their own individual immigration authorizations. Today, recruiters hire workers directly in their communities of origin or in Tecu´n Uman, a border city on the Guatemalan side. They gather them in the border points of Ciudad Hidalgo, Talisma´n or Unio´n Jua´rez, where they collect these workers’ identifications and photographs and take care of their FMVA. However, recruiters give the FMVAs to plantation owners, who – illegally but with the acquiescence of all involved – retain these forms in order to force workers to stay on the plantations for at least one month. Those Mexican campesino and ejido farmers, who need only a few laborers, go directly to border posts rather than using the service of recruiters to hire workers. It should be noted, in general, that the immigration form covers only farm workers but not ‘‘traveling companions.’’ This means that family members –spouse, children, younger siblings, etc.— who also work on the farm to supplement the family income are not counted in the official statistics. This situation explains the fact that official data show that 90% of the immigrants are men (Rojas & A´ngeles, 2006).3 Because a large number of the farm workers enter without documents, official data do not reflect the reality of the immigration flow in southern border agriculture. Despite the importance of this labor for the entire southern region of Chiapas, and required skill levels – such as harvesting coffee along sharp mountain slopes, avoiding damages to plants, and knowing how to pick the mature beans – the absence of protection from Mexican authorities and the lack of programs to improve working conditions is obvious (A´ngeles, 2004). A state of defenselessness, poor working conditions, mistreatment, and abuses by large farm and plantation owners as well as extortions by immigration authorities are overwhelming.4 These workers’ foreign, indigenous, and undocumented status along with the lack of organizations that can support them and no negotiation power vis-a`-vis their recruiters and employers are factors that contribute to the discrimination that they suffer. The seasonal immigration of Guatemalan indigenous workers to the plantations of Soconusco and the Sierra Madre has been an historical constant. Yet, as the effects of neoliberal globalization are felt, it is at risk of disappearing. The arrival of Guatemalan seasonal farm workers to the coffee plantations is diminishing. The disarticulation of the economies of the entire Central American region pushes workers to massively emigrate

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beyond Chiapas to the United States. This emigration is now permanent; it involves both Guatemalan farm workers and local residents; it accelerated due to the crisis of the coffee sector resulting from its deregulation in the late 1980s; and it deepened after hurricanes Mitch (1988) and Stan (2005) wiped out villages and infrastructures in the region.

Deregulation of the Coffee Market and Poverty of Coffee Growers The rupture of the international coffee agreements in 1989 put an end to one of the last raw-materials market regulation systems established in the postWorld War II period. The liberalization of markets was promoted by the United States, as it opposed product regulation and subsidies, and was supported by Mexico through a process of trade opening that would culminate with the establishment of NAFTA a few years later (Renard, 1999). The international coffee agreements regulated the coffee market at the international level and guaranteed stable prices through a system of commercialization quotas. Following the liberalization process, market control shifted from the states to the coffee export and coffee roasting corporations. This change occurred in a context of world overproduction (Daviron, 1993; Renard, 1996, 1999). Prices immediately plummeted to half of previously reached levels at one dollar a pound in Mexico. While they temporarily rebounded due to speculation, they eventually settled at very low levels. In 2002, the worst year, the price of a bag of Mexican coffee dropped to 41 US cents per pound. The National Coordinator of Coffee Growers Organizations (Coordinadora Nacional de Organizaciones Cafetaleras) estimated that producers lost 65% of their income in the first 15 years of the crisis (Celis, 2005). This overproduction was not a random occurrence. Rather it was linked to corporate global supply strategies. Roasting firms adopted new technologies that allowed them to save on raw materials by substituting coffee from one region with that from another without alterations in the taste of the final product. For example, Procter & Gamble substituted the 500,000 bags of washed mild coffee from Mexico with robust coffee from Vietnam,5 the country that became the world’s second largest producer in the course of just one decade mostly due to World Bank financing. In the early 1990s, the resounding fall of international prices was coupled by the dismantling of the primary national governing body of coffee production, the Mexican Institute of Coffee (Instituto Mexicano del Cafe´ – INMECAFE´). INMECAFE´ extended credit to the small producers,

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provided technical assistance, purchased coffee for its export, and administered the permits for production. With its disappearance, its marketing and export functions were shifted to the private sector. As a result, in the almost 20 years since regulation, a handful of corporations now fully control the Mexican market. This centralization was possible through the existence of very generous lines of credit in US dollars available to corporations at much lower interest rates than those charged by national banks. This easy credit allowed corporations to pay cash to producers and finance the cost of harvest. The corporations present in Me´xico are the world largest coffee groups. Neumann Gruppe is the leading coffee group in partnership with the region’s largest export house before the crisis, Beneficiadora California. Becafisa, the Mexican affiliate of Volcafe´, is part of a larger consortium, Unifina, with investments in real estate, international investment banks, and other financial entities. It is also part of a more important group, ERB, with interests in the industrial sector. The strongest commercial firm is AMSA (Agroindustrias de Me´xico S.A.) of the ECOM group. To ECOM group belongs the US importer Atlantic Coffee, which bought the coffee division of Cargill. It finances a network of intermediaries (the coyotes) who visit communities and buy up coffee from small producers at low prices. They are known for organizing and dividing campesino groups in order to obtain their harvests. It is estimated that these companies export close to 70% of Mexican coffee (Pe´rez Grovas, Cervantes, Burstein, Carlsen, & Herna´ndez, 2002, p. 50) and AMSA alone is estimated to handle one million of the approximately two million bags of coffee exported from Mexico.5 Another corporation that controls coffee production in Mexico is Nestle´ that buys robust coffee for preparation of its instant coffee products for the domestic market. The entire low region of Soconusco once produced the Arabic variety. However, Nestle´ forced a reconversion to robust coffee and through it was able to fix prices and monopolize purchases. These large buyers do not offer better prices for high-quality varieties, buying everything indiscriminately as ‘‘washed prima,’’ the lowest export quality level (Consejo Nacional de Organizaciones de Productores de Cafe´, 2006). Because they do not recognize local farmers’ upgraded production, they heavily reduce the earnings of local producers and manipulate prices. In 2004–2005, Mexico had its lowest export figures in 30 years: 1.7 million bags. This was largely due to the fact that a significant number of producers emigrated. The coffee crisis has had a considerable impact on the regional economy. In the state of Chiapas in the year 2000, agriculture employed 47.3% of total economically active population (EAP)6 (Villafuerte & Garcı´ a, 2006).

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Chiapas was the largest coffee producer in the nation and the Soconusco– Sierra Madre region had the largest production in the state. Coffee represented almost 50% of the value of all crops in Sierra Madre (Lo´pez Are´valo, 2007). The same can be said for Central America. Guatemala, Nicaragua, Honduras, and El Salvador depend to a large degree on the coffee economy. For example, between 1995 and 2000, coffee represented 25% of the value of Nicaraguan exports, and 28% of the Central American population obtains part of its income from coffee (Herna´ndez, 2005). The coffee crisis has been catastrophic for these countries: in September 2002, Nicaraguan coffee workers seized the Pan-American Highway to protest their living conditions, and in August 2003 they held a march to the city of Matagalpa to denounce the fact that they were dying of hunger (Herna´ndez, 2005). Faced with this situation, the most practiced solution has been the emigration to the United States. This emigration was not relevant prior to the 1990s. But since then, it has become a massive phenomenon. Accordingly, these coffee regions were transformed from importers of labor to emigration regions. In the case of Soconusco, the region has also been transformed into one of transit where immigrants face all the dangers of their undocumented status and the consequences of stricter Mexican immigration laws.

To Make Matters Worse: Consequences of the ‘‘Shrinking’’ State As if the collapse of the coffee economy were not enough, the consequences of severe natural disasters impacted upon the already depressed socioeconomic conditions of the Central America region. In 1988, Hurricane Mitch wiped out entire villages and washed away highways, roads, soil, and trees. They were not yet rebuilt when in October 2005 Stan had even more devastating effects on southern Chiapas. The region was brutally affected: thousands of hectares of coffee, banana, and mango plantations disappeared, and once again, highways and bridges were washed away by the water, and roads covered under layers of mud. The effects of the natural disasters compounded the neoliberal posture of the Mexican nation state that resulted in the lack of adequate economic support policies and credit for rural areas. Consequently, producers are now reduced to the condition of poor, subject to charity programs. More than two years after Stan, infrastructure reconstruction remained unfinished7 (bridges, roads, highways, schools) while many producers have not been compensated for their

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losses and the fact that in many instances they were literally left without land. The century-old railway that runs along the Chiapas coast to Tapachula has also not been reactivated. Inaugurated in 1908 and connecting the Tehuantepec Isthmus to Coatzacoalcos, this railway has been one of the key factors aiding the development of Soconusco. As the port of Puerto Madero was continually affected by sedimentation, the train was the route most effectively used to transport crops to Veracruz for sea shipment to Europe. It was also the route to bring production and consumption goods to Tapachula. The railway also brought new waves of migrants from several regions of the country, attracted by the prosperity of Soconusco (Renard, 1993, p. 27). Over the years, the train carried much more than merchandise; it became the cheapest means to cross the country for Central American immigrants who had no money to pay a smuggler, and opted to travel on their own as stowaways. Ferrocarriles de Me´xico was a state company untill it was privatized in 1999. In the midst of its dismantlement, Genesee & Wyoming Inc. obtained a 30-year concession for the 2,020 km stretch of Ferrocarriles Chiapas-Mayab S.A. de C.V., with routes in the states of Chiapas, Tabasco, Oaxaca, Campeche, and Veracruz. By 2004, the Chiapas government had seized dozens of its train cars declared unsafe because the company failed to comply with agreements to invest in infrastructure upgrades (La Jornada, 26 June, 2007). In 2005, hurricane Stan affected 68 bridges and blew away railroad sections along the 280 km from Arriaga to Tapachula. These railways were never rebuilt, with the company demanding that the Mexican government provide the resources. In June 2007, from Greenwich, Connecticut, Genesee & Wyoming Inc. announced the closure of its operations in Mexico and returned the concession, arguing it could not guarantee the reconstruction of this stretch of railway. This action left 1,200 railway workers unemployed and the Mexican government responsible for their ‘‘rescue.’’ And as the company transported several modern engines back to the United States by ship, thousands of Central Americans who recurred to the train to stowaway to the north, were left stranded in various locations along the route (La Jornada, 1, 10, 14, 15 and 27 August, 2007). Faced with the size of the disaster and the slow, difficult, and insufficient pace of reconstruction, and with the state of abandonment and ruin of their economy, many decided that there was no other future than emigration. In the following sections we will see how the southern border of Chiapas lost importance as agricultural destination, but gained relevance as a transit route and grew exponentially as a point of origin of emigration.

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Insufficient Farmhands to Harvest Coffee Many Guatemalan laborers are now opting for permanent migration to the United States instead of the seasonal migration that would keep them close to their native lands. The low and unstable prices of coffee forced large and small Mexican producers to reduce the demand for, and pay to, farm workers as discrimination and exploitation continue. Yet, even if wages were raised, they could not compete with those available in the United States.8 This situation is reflected in a sharp drop in the arrival of Guatemalan farm workers to Chiapas. While around 70,000 documented workers arrived each year between 1995 and 1997, that number fell to less than 50,000 in 1998, in this case explained by the destruction caused that year by hurricane Mitch. The numbers inched upward in the following years, falling again beginning in 2001 to around 40,000 workers, a number maintained over the next five years (A´ngeles, 2004; Villafuerte & Garcı´ a, 2006; La Jornada, 13 April, 2007). The 2007 harvest, which took place between November 2007 and February 2008, was affected by the lack of workers (La Jornada, 29 December, 2007). To alleviate this drop, Mexican authorities proposed to relax immigration rules and made available visas for up to five years(La Jornada, 7 April, 2007). Where the law of the market does not work, other recruitment mechanisms are strengthened, such as that 19th-century institution of the ‘‘enlisters’’ – recruiters who arrive to the communities of seasonal workers and lure them in with cash advances and the commitment to pay off their debts with work on the Chiapas farms. In contrast with the scarcity of agricultural workers, poverty in Central America is bringing in a new wave of undocumented female migration. These women work in the service sector in areas such as domestic employment, small commerce – including established shops and street vending – and sex trade. In Ciudad Hidalgo, located on the border, all services and domestic work rely on Central American workers, largely from Honduras. In Tapachula, the regional government headquarters, live-in domestic help – that is, permanent and on-site household employees – are made up by young Guatemalan women, mostly indigenous and 95% single, who emigrate due to the poverty in their communities and who work to help their families (A´ngeles, 2004; Rojas & A´ngeles, 2006). Other women move back and forth across the border as true traveling salespeople, while others are employed by established shops in border locations. There are, however, no statistics or data on these migrant women or their dependants who accompany them. But the presence of Central American women is especially striking in the sex trade. In Ciudad Hidalgo, location in which migration

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authorities and police are concentrated, between 90% and 95% of sex workers are Guatemalan, Honduran, or Salvadoran women (A´ngeles, 2004) who offer their services in bars, cantinas, and restaurants. They are generally victims of abuses and extortions by the authorities. For many of them, Chiapas is a place of transit, and their goal is to save enough money to continue to the northern Mexican border (A´ngeles, 2004).

A Waiting Station to the Northern Border As a consequence of the stricter immigration rules and security measures implemented after 9/11, more aggressive methods of persecution have been employed against undocumented migrants who enter the United States from Mexico. For the transimmigrants, the southern border of Mexico has been transformed into a waiting station to the northern border, and a ‘‘purgatory’’ from which they often are unable to escape. In 2007, 1.6 million individual border crossings were registered along the southern Mexican border. Undocumented crossings accounted for 72.5% of the total, and 400,000 of these crossings were Central American residents. Some of them crossed with the goal to work in the border region, and the rest, an estimated 248,000, wanted to reach the United States. On average only 70,000 would eventually make it, while the rest will be deported either by Mexican or US immigration authorities.9 An estimated 150,000 Guatemalans tried to reach the United States through Mexico in 2007, but 60,000 were repatriated by land and 25,000 by air by the United States (Sigu¨enza, 2008). The majority of Central Americans who enter Mexico do so through the state of Chiapas: 53.2% in 2001 and 45.5% in 2002. Within the state, Soconusco is the most employed port of entry with 54% of entries in 2002 (A´ngeles, 2004). Because this route is so heavily traveled, it has turned into a source of dangers for immigrants: extortion by Mexican authorities, subornation and threats, theft, and rape of female immigrants are the daily norm.10 Immigrants cross the borderline at the Suchiate river and then continue to Tapachula to jump on a passing Chiapas–Mayab cargo train to Veracruz. Tied on the roof with wires to keep from falling off and constantly chased by the police, immigration agents, private guards, and members of the Central American gangs known as the maras,11 they proceed on their journey north. This is called the ‘‘train of death’’ due to the number of accidents, deaths, and mutilations that have occurred along its route.12 Since the disappearance of almost 300 km of railway between Tapachula and Arriaga due to hurricane Stan, immigrants have to cross this stretch on foot,

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evading the dangers along the way, before they can meet up with the train in Arriaga, a new center of concentration of immigrants and police repression (Vericat, 2007). Mexico deported 240,269 emigrants in 2005 and 185,000 in 2006, of which 95% were from Guatemala, El Salvador, and Honduras, 2% from Nicaragua, and the rest from other parts of the world.13 According to a representative of the Mexico’s National Immigration Institute (Instituto Nacional de Migracio´n – INM), the 60,000-person difference between 2005 and 2006 is due in part to the announcement of construction of the wall between the United States and Mexico, which discouraged many potential emigrants, and also due to the prevailing environment of corruption among police and immigration authorities. In 2007, 2,225 human traffickers were detained.14 The increase of control along traditional transit routes, in Soconusco, Chiapas Coast, and Tehuantepec Isthmus, has engendered the appearance of new, more dangerous crossing points and routes, such as, for example, by sea. It is now frequent to find drowned bodies along the beaches of Chiapas and Oaxaca (Renard, 2000). At high costs, it has also forced immigrants to use to the networks of human smugglers or polleros, which are sometimes linked to drug trafficking networks.15 The effort to contain Central American immigrants is backed by a discourse with strong ideological undertones. Despite the fact that the previous Mexican administration (2000–2006) had already implemented more restrictive policies against immigrants, the new administration of Felipe Caldero´n (2006–2012) has repeatedly denounced the porous status of the southern border and the previous administration’s lack of a real immigration policy. Caldero´n announced a proposed reform of the General Population Law (Ley General de Poblacio´n) to address the flow of Central American immigrants and to continue to reinforce border security as means to ‘‘protect against the advance of terrorism.’’16 In reality, this policy is leading to a criminalization of undocumented immigrants as it transforms the immigration question into a national security issue, which is addressed through police force – Federal police and INM agent operatives were increased in 2007. Nongovernmental organizations, such as Sin Fronteras, denounced the extremely poor conditions of jails and INM detention centers. In 2006, the official National Human Rights Commission (Comisio´n Nacional de Derechos Humanos – CNDH) documented serious violations of immigrant rights in National Migration Institute facilities: violence, mistreatment, and unwarranted punishment inflicted to undocumented detainees who are housed in unsanitary locations. The CNDH has also documented that the

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INM allows private police entities to pursue and detain and abuse immigrants. It is often the case that immigrants are thrown off the train, often resulting in the loss of limbs and other severe injuries (La Jornada, 12 February, 2007). To respond to the increased flow of immigrants, the number of immigration stations has doubled from 25 to 52 along the southern border. Restrictions have been increased in these stations, and detainees have been prevented from obtaining adequate legal assistance, access to NGOs, advisors, and family members. All the above worked to transform the immigration policy of Mexico and actions of its officers into an extension of those of the United States. Mexico has been converted into a long vertical border through which immigration to the United States is filtered.

The Empting of a Region Like the other coffee-growing states and unlike several central Mexican states (Jalisco and Zacatecas, for example),17 until a few years ago, Chiapas was not significantly affected by international emigration. However, in 2004 Chiapas received more remittances than Zacatecas (Villafuerte & Garcı´ a, 2006).18 The money sent by these immigrants maintains the economy of Chiapas afloat in the midst of a crisis of significant proportions. In 1990, the state of Chiapas was 29th in terms of quantity of remittances received; in 2001 it claimed the 15th place, in 2003 the 12th (Villafuerte & Garcı´ a, 2006), and since 2005 it has occupied the 8th place (communication by Jan Rus, August 2005). In 2006, Chiapas received 807 million US dollars in remittances,19 surpassing income obtained for coffee or tourism. Remittances now represent 12% of state GDP (Villafuerte, 2008). In Soconusco and Sierra Madre, evidence of emigration is everywhere. Wherever one looks, travel agencies offer trips north, with daily departures20; in Huixtla, coffee warehouses have been transformed into travel agencies (La Jornada, 22 December, 2002), and the buses known as tijuaneros reach the border city of Tijuana in 2.5 days and cost 1,300 pesos (Vericat, 2007). The immigrants from the region take advantage of networks used by the Central Americans, but with much less problems than their outof-the-country counterparts (A´vila, 2006). However, they are all equal once they reach the US border: they are all undocumented. Data on the evolution of the number of Chiapas natives deported from the US Border Patrol is illustrative: from 6,129 individuals deported in 1994–1995, the number more

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than doubled to 13,372 individuals in 1998–1999 and ballooned to 30,523 in 1999–2000.21 Combined with official poverty reduction programs, charity, and focused programs, such as Oportunidades, emigration is now part of the family reproduction strategy as it replaced the role previously played by land. In many cases, selling the land meant having the monetary resources to emigrate (Villafuerte, 2008). As young males emigrate, women and the elderly replace them in the coffee fields. The phenomenon is already irreversible; the emigration networks that link the communities of origin and to those of destination and that involve relatives and neighbors, are strengthening. Additionally, success stories – such as those of immigrants who come back with household goods and money and improve their homes – motivate others to try emigration. The coffee growers have been transformed into part of the massive reserve army of cheap immigrant labor for the United States economy.

Conclusions The coffee regions are now producers of poverty and consecuently emigrants who search for better opportunities abroad. Pushed by liberalization of the coffee market, those who made up the Guatemalan reserve army of cheap labor for the southern Chiapas coffee plantations have now joined their Chiapas peers to fill the ranks of the US labor force. However, the free circulation of commodities is much freer than the circulation of people. As barriers and attacks have increased against immigrants along the US–Mexican border, an increasingly restrictive and repressive policy has been implemented by Mexican authorities against those Central Americans who pass through the country. Mexican immigration policy has de facto become an extension of the US policy. And, as in the case of the United States, all of this is justified in the name of national security and the fight ‘‘against terrorism.’’ Yet the pulling effects of a sustained demand for inexpensive labor in the United States and the freemarket-induced deteriorating economic situation in Mexico fuel emigration flows. Faced with limited alternatives and increasing immigration restriction, these workers are marginalized through their ‘‘illegal’’ status. This is a situation that makes them more vulnerable and more easily exploited (Harvey, 2005). Because of the neoliberal global phase of capitalism and the persistence of the economic crisis in the region, immigration constitutes a structural element of accumulation. At the southern border, it is easy to foresee

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intensification of the movement of emigrants along with the violence, exploitation, and contradictions that it entails.

NOTES 1. These remittances stabilize the balance of payments of receiving countries. In the cases of Mexico and Central American countries, they are primarily invested in consumption goods that help in the survival of the immigrants’ families. They are not channeled to productive investments (Sigu¨enza, 2008; Rudin˜o, 2008; Martı´ nez Pizarro, 2003). As a result of the economic crisis, in 2009 remittances were 16.13% lower than in 2008 (Data from the National Bank of Mexico, El Universal, 1 December 2009). This decline, however, was compensated by a 35% devaluation of the Mexican peso during the same time period. 2. The border between Mexico and Guatemala was defined after a set of diplomatic disputes in 1883. Until then, the Mayan Indians migrated seasonally between their cold lands where they raised potatoes and wheat to the warm lands of Soconusco where they planted corn (Spenser, 1988, p. 64). 3. Mexican authorities have recently begun to register women separately. Accordingly, this percentage is now different (Rojas & A´ngeles, 2006). 4. For information on the rural labor conditions (rudimentary sleeping barracks, retained wages, scarce and monotonous food, etc.) and worker complaints, see Renard (2000). 5. Information provided by the manager of a purchasing agency, August 2006. 6. Compared to 15.8% at the national level. Data obtained from the XII General Population and Housing Census of the year 2000. 7. This situation is much from that of the Cancu´n area in the state of Quintana Roo. It was also ravaged by hurricane Wilma in the same year. However, public funds were invested and a rapid reconstruction took place to guarantee the tourist season. 8. In 1999, workers were paid 40 pesos per box of coffee (harvest); in 2007, around 60 pesos, varying according to the distance from the border. A skilled coffee picker, assisted by his family, is able to cut a box and a half in a 9–11 hour day. (1 dollar ¼ 10.75 pesos in 2007). 9. Data from the National Migration Institute, INM (La Jornada, April 25 and 29, 2007). 10. These human rights violations are documented and reported by the immigrant shelters Casas Albergues del Migrante in Tecu´n Uman and Tapachula and the Fray Matı´ as de Co´rdova Human Rights Center in Tapachula. 11. The maras are groups of Central American delinquents. They originate in the gangs of the neighborhoods of Los Angeles. Members deported by the US authorities replicated the gangs in Central America. 12. For more details on the trips of immigrants by train, see, among others, Renard (2000) and Herna´ndez (2005), as well as the reports of numerous human rights organizations and immigrant shelters.

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13. Data from the Under-Secretary of Population, Migration and Religious Affairs of the Ministry of the Interior (Subsecretario de Poblacio´n, Migracio´n y Asuntos Religiosos, Secretarı´ a de Gobernacio´n) (La Jornada, April, 24, 2007, p. 50). 14. La Jornada, April 29, 2007, p. 3. 15. An illustration of this is the series of declarations by a thug of the Golf drug cartel arrested in Campeche, who was allegedly recognized being responsible for moving a weekly average of 100 undocumented Central Americans across Mexico, and charging groups of human smugglers ‘‘rights,’’ in addition to controlling the traffic and distribution of drugs in Campeche (La Jornada, April 19, 2007, p. 5). 16. La Jornada, April 24, 2007, p.50 and May 9, 2007, p. 48. 17. The relation between the coffee crisis and emigration does not pertain to Chiapas exclusively. On the case of Veracruz, see, for example, Mestries (2003) and Herna´ndez (2005). Six of 14 deceased immigrants in the Yuma desert in May 2001 were coffee growers from Veracruz. 18. This is due to the fact that this outmigration is more recent and workers leave their entire families in Mexico. It is not a consequence of higher number of emigrants. 19. Data from Consultores Internacionales (La Jornada, April 22, 2007). 20. Villafuerte and Garcı´ a mention the existence of 27 of these agencies in the town of Frontera Comalapa. 21. Survey on immigration along the northern border of Mexico, 1998–1999, by the government of the state of Chiapas, quoted by Villafuerte and Garcı´ a (2006).

ACKNOWLEDGMENT The author would like to thank Alessandro Bonanno for his assistance in the drafting of this version of the chapter.

REFERENCES A´ngeles, C. H. (1999). Trabajadores Agrı´ colas Guatemaltecos en el Soconusco, Chiapas. Derechos Humanos y Ciudadanı´a (Human Rights and Citizenship). Annual Supplement of La Jornada, Mexico 28. A´ngeles, C. H. (2004). Las Migraciones Internacionales en el Soconusco, Chiapas: Un Feno´meno Cada vez ma´s Complejo. Revista Comercio Exterior, 54(4), 312–318. Aragone´s, A. M. (2004). Migracio´n y Explotacio´n de la Fuerza de Trabajo en los An˜os Noventa: Saldos del Neoliberalismo. In: B. Rubio (Ed.), El sector Agropecuario Mexicano Frente al Nuevo Milenio (pp. 239–268). Mexico: UNAM- Plaza y Valde´s. A´vila, R. L. E. (2006). La Migracio´n en Tierras Mayas: Los Choles y Tzeltales Frente al Proceso de Globalizacio´n Econo´mica. Artı´culos y Ensayos de Sociologı´a Rural, Departamento de Sociologı´ a Rural, Universidad Auto´noma Chapingo, Mexico, 2, pp. 41–67.

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Pohlenz, C. J. (1994). Dependencia y Desarrollo Capitalista en la Sierra de Chiapas. Mexico: CIHMECH-UNAM. Ponce, J. P. (1985). Palabra viva del Soconusco. Mexico: SEP-CIESAS. Re´bora, H. (1982). Memorias de un Chiapaneco (1895–1982). Mexico: Ed. Katu´n. Renard, M.-C. (1992). El Mercado Mundial y la Produccio´n de Cafe´ en el Soconusco, Mexico. International Journal of Sociology of Agriculture and Food, 2, 74–87. Renard, M. C. (1993). El Soconusco, una Economı´a Cafetalera. Direccio´n de Difusio´n Cultural, Universidad Auto´noma Chapingo, Mexico. Renard, M.-C. (1996). Les Interstices de la Globalisation. Un Label (Max Havelaar) pour les Petits Producteurs de Cafe´. PhD thesis in rural studies (sociology), Universite´ de Toulouse le Mirail, France. Renard, M.-C. (1999). Los Intersticios de la Globalizacio´n. Un Label (Max Havelaar) para los Pequen˜os Productores de Cafe´. Mexico: CEMCA. Renard, M. C. (2000). Frontera Sur. Cuadernos Agrarios Nueva E´poca, Mexico 19/20, pp. 189–206. Rojas, W. M., & A´ngeles, C. H. (2006). Migracio´n en la Frontera sur de Me´xico: Mujeres Hacia y a Trave´s del Soconusco, Chiapas. In: Las Mujeres en la Migracio´n. Testimonios, Realidades y Denuncias (pp. 41–82). Mexico: Centro de Reintegracio´n Familiar de Menores Migrantes A.C. Rubio, B. (2007). Las Causas Estructurales de la Migracio´n Rural en Me´xico (1994–2006). Paper at the VI Congress of the Mexican Association for Rural Studies, Veracruz, Mexico. Rudin˜o, L. E. (2008). Remesas: Consumo y ahorro, no inversio´n. La Jornada del Campo 5. Seargent, H. (1980). San Antonio Nexapa. Col. Ceiba, Fonapas, Chiapas. Sigu¨enza, P. (2008). Guatemala: Do´lares Desde EU Atenu´an la Pobreza. La Jornada del Campo 5. Spenser, D. (1988). Los Inicios del Cafe´ en el Soconusco y la inmigracio´n extranjera. In: B. Von Mentz, et al. (Eds), Los empresarios alemanes, el Tercer Reich y la oposicio´n de derecha a Ca´rdenas, Tomo 1 (pp. 61–88). Mexico: CIESAS. Vericat, N. I. (2007). La Otra Frontera. La Jornada Semanal, 626, 3–9. Villafuerte, S. D. (2008). EL TLCAN y la migracio´n chiapaneca. La Jornada del Campo 5. Villafuerte, S. D. and Garcı´ a, A. M. D. C. (2006). Crisis Rural y Migracio´n en Chiapas. Migracio´n y Desarrollo, First semestre: 103–130. Available at www.migracionydesarrollo. org. Von Mentz, B. (1988). Las Empresas Alemanas en Me´xico (1920–1942). In: B. Von Mentz, et al. (Eds), Los Empresarios Alemanes, el Tercer Reich y la Oposicio´n de Derecha a Ca´rdenas, Tomo 1 (pp. 121–230). Mexico: CIESAS.

CHAPTER 6 GLOBAL PRODUCTIVE CAPITAL MOBILITY: THE CASE OF CHILEAN FARMED ATLANTIC SALMON Douglas H. Constance and M. Kirk Jentoft ABSTRACT This chapter combines a global value chain methodology with the case of the development of the farmed Atlantic salmon industry in Chile to inform discussions regarding the globalization of economy and society. The research documents the shifting structure of the value chain from the north to the south as Chile replaced northern Europe as the locus of production and the major world supplier of farmed Atlantic salmon. Farmed salmon was supported by the Chilean state as part of its exportoriented industrialization model that attracted foreign direct investment (FDI) from northern TNCs. Chile’s low costs of production combined with growing environmental problems in the north and global retailers’ demand for large quantities of low-cost product resulted in the restructuring of the farmed Atlantic-salmon value chain as northern capital sourced the south as a lucrative production platform to service northern consumers. A detailed investigation of the rise in dominance of the firm Marine Harvest is provided to illustrate the process of industry concentration the Chilean farmed-salmon industry. This model has generated a legitimation crisis related to environmental degradation and Globalization and the Time–Space Reorganization: Capital Mobility in Agriculture and Food in the Americas Research in Rural Sociology and Development, Volume 17, 167–204 Copyright r 2011 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1057-1922/doi:10.1108/S1057-1922(2011)0000017009

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labor abuses resulting in social movement organization both nationally and internationally. The chapter concludes with a discussion of the implications of the Wal-Mart Effect on the agrifood industry in particular and in the farmed-salmon industry in particular.

INTRODUCTION Chilean farm-raised Atlantic salmon sold in Wal-Mart in Texas. How did this come to be? This is the question we address in this chapter. This chapter combines a global value chain methodology1 with the case of the farmraised Atlantic salmon industry to inform discussions regarding capital mobility under globalization. The chapter documents the shifting structure of the value chain from the north to the south as Chile replaced northern Europe as the locus of production. Chile’s low costs of production combined with growing environmental problems in the north and global retailers’ demand for large quantities of low-cost product resulted in the restructuring of the farmed Atlantic salmon value chain as northern capital sourced the south as a lucrative production platform to service northern consumers. The case is divided into five parts to illustrate and establish the historical development and current structure of the farm-raised Atlantic salmon value chain. First, a brief summary of the development of the farm-raised salmon industry is reported. This section documents the origin of the industry in the north and steady shift to the south in an attempt to cut costs and develop countervailing power in relation to the global retailers. Next, an overview of the development of the industry in Chile is provided, followed by a discussion of the environmental and social crises associated with expansion of the industry. Farm-raised salmon was supported by the Chilean state as part of its export-oriented industrialization model that attracted foreign direct investment (FDI) from northern TNCs. This model has generated a legitimate crisis related to environmental degradation and labor abuses resulting in social movement organization both nationally and internationally. The section ‘‘The Marine Harvest Story’’ provides an overview of the history and development of the firm Marine Harvest in general, and in Chile in particular. The merger that created Marine Harvest, the largest farmraised salmon company in the world, is reviewed to illustrate the activities and mobility of northern capital in restructuring the value chain. Finally, the role Wal-Mart plays in the global value chain is discussed. Wal-Mart is

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used as an exemplar of the growing power of the global retailers to reorient value chains to a lowest-cost structure. The chapter concludes with some analysis of the utility of employing the farm-salmon case as a mechanism to better understand the implications of capital mobility under globalization.

A Brief History of Atlantic Salmon Aquaculture The oceans simply can’t produce enough wild fish to satisfy the world’s appetite in the 21st Century. And so in a global economy that knows no borders, a fish from the far north has found new life here in the far south. (Kofman, 2007, p. 3)

In response to the continuing collapse of the global capture fisheries due to overfishing by industrial fleets, aquaculture has steadily increased its share of the fish products sold globally (Bailey, Sinclair, & Jentoft, 1996). Aquaculture has a long history dating back thousands of years in China and Egypt. Industrial forms of aquaculture emerged after World War II in response to growing demand for fish products in developed countries. Aquaculture increased from 4% of fish production in 1970 to 27% in 2000. It is the fastest growing sector of the world food economy, increasing by more than 20% per year (Campos, 2006). In the developing countries fish is the single most important export, increasingly farmed fish (Wilkinson, 2006). In 2004 aquaculture accounted for about one-third of the world’s total supply of food fish and will continue to increase in importance (White, O’Neill, & Tzankova, 2004). While large-scale aquaculture has concentrated on shrimp in Asia and salmon in Norway, Scotland, Canada, and Chile, in recent years it has spread to ‘‘whitefish species’’ (seabass, tuna, halibut, haddock) and into the Mediterranean, Oceana, and the United States (Staniford, 2003). For some fisheries observers, industrial aquaculture is a ‘‘Blue Revolution’’ that can supplement the capture fisheries and contribute to feed the world’s growing population; for others it is an unsustainable production model dominated by TNCs, which generates negative social and environmental impacts (Weber, 2003). Farmed Atlantic salmon is especially controversial. Until the 1980s salmon was a luxury food sourced from the capture fisheries. Supplies were limited to what could be caught during the fishing season. The rapid expansion of farmed salmon in the late 1980s created a year-round global salmon market. The United States and Japan are the world’s leaders in the harvest of wild salmon; Norway and Chile are the biggest producers of farmed salmon. Two-thirds of the farmed salmon sold in the United States comes from Chile, most of the rest from Canada (Fishman, 2006b). Worldwide farmed-salmon production has always been

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dominated by just a few countries; in 1999 four countries (Norway, Chile, the United Kingdom, and Canada) supplied 80% of total production (Bjorndal & Aarland, 1999). Farmed (or cage-raised) Atlantic salmon began in Scotland and Norway in late 1960s, expanded into Maine, Washington State, and British Columbia in the early 1970s, then to New Zealand, New Brunswick, and Chile in the late 1970s, and to Australia in the 1980s. In 1981 Norway produced 70% of global supplies (Bjorndal & Aarland, 1999). In 1980 farmed salmon accounted for about 1% of the salmon market. In 1985 the world farmed-salmon harvest was 50 Kmt; it doubled in two years and by 1990 was 300 Kmt. By 1991 farmed salmon represented 26% of the world salmon market. During the 1990s the industry expanded rapidly into Canada and Chile. As a result, the price dropped as worldwide demand increased. By 1992 Chile had passed both the United Kingdom and Canada and moved into the number two position. By 1995 production was 537 Kmt, one-third of the world market; Chile had about one-fifth of this market (98.7 Kmt). In 1999 farmed production surpassed the wild catch. In 2000 total farmed production was 1 Mmt; Chile accounted for about one-fourth of the total (245 Kmt). By 2002 six companies controlled one-half of the global salmon-farming industry (Fishman, 2006b; SeaWeb, n.d.). In 2006 Norway was still the largest producer in the world, but was followed closely by Chile (38.7% and 37.9%, respectively) (Estrada, 2006). By 2007 about 70% of salmon consumed was farmed (Kofman, 2007). Salmon farming on a commercial scale is about 20 years old and on a massive scale about 10 years old. Campos (2006) divides the farmed-salmon production chain into three sections: freshwater, saltwater, and processing. The freshwater stage includes the production of eggs, fry, and smolts (juvenile salmon). This stage lasts about a year as the hatched eggs grow from fry into smolts (up to 85–100 g). The saltwater stage includes the fattening and harvesting activities where the smolts are transferred to the cages in the fjords to be fattened for 15–18 months and harvested at between 4.5 and 5.0 kg. The final stage of the production chain is processing. While the industry has proven to be very productive, environmental and social concerns have accompanied its growth (Bailey et al., 1996; Skladany, 2007; Weber, 2003). The farmed Atlantic-salmon system has proven to be destructive to the marine environment and related aquatic animals. The freshwater lakes, where the smolts are raised, are experiencing environmental degradation. The open-net pens, where the fish are grown to market size, are a metal cage at the surface with nets hanging down to a netted bottom. There are often tens of thousands of fish per net and 1–1.5 million fish per farm.

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A farm of 1 million salmon produces about the same waste as 65,000 people (Fishman, 2006b). Uneaten food and feces form a layer of sludge under the cages that pollutes the local waters and kills aquatic life (Naylor, Josh, & Smith, 2003). Plankton blooms, algae blooms, and red tide increase in frequency due to the nutrient load. The monoculture nature of the farms requires regular use of antibiotics to suppress disease. There are cases of overuse of antibiotics and antibiotic resistance. Disease outbreaks in the cages sometimes transfer to wild species. Additionally, caged-salmon escapes are common, leading to genetic contamination and the spread of diseases. These environmental problems with the farmed system manifested quickly (Naylor, Josh, & Smith, 2003; Weber, 2003). In 1975 an outbreak of parasites moved from the cage-raised hatcheries to wild salmon in Norway. Storms released cage fish into the wild, bacterial infections affected both wild and cage fish, and wild fisheries collapsed due to pest infestations from the farms. By the late 1980s escaped farmed Atlantic salmon were found in wild-caught Pacific salmon nets. In 1990 one-third of the salmon spawning in Norwegian rivers were escaped cage salmon. In response to these negative consequences, in 1990 Alaska banned cage farming to protect the wild salmon stocks. In the 1990s Washington State declared escaped Atlantic salmon a ‘‘living pollutant,’’ escaped farmed salmon were caught in Alaskan rivers, British Columbia implemented a moratorium on fish farming, and wild Atlantic salmon were declared an endangered species in Maine. In early 2000 antibiotic-resistant bacteria were found in Chilean salmon farms and European farm-raised salmon were found in Canadian waters. A 2000 study reported that farmed salmon were breeding in the rivers of British Columbia (Volpe, Taylor, Rimmer, & Glickman, 2000). In 2003 the European Union discovered an illegal fungicide in a shipment of Chilean salmon. A few salmon farming companies in Maine were shut down for two years for violating the U.S. Clean Water Act. Studies released in 2003 reported that wild salmon were in danger of extinction due to genetic and competitive pressures from cage raised. In 2003 U.S. grocery chains were posting signs alerting customers of ‘‘added color’’ to make cage-raised salmon flesh pink (SeaWeb, n.d.). A 2004 study showed PCBs and dioxin were higher in cageraised than wild-caught salmon (Hites et al., 2004). Studies also concluded that sea lice originated from British Columbia, Canada’s salmon farms were killing significant percentages of wild juvenile salmon as they left the coastal rivers and headed to the sea (Leahy, 2006). Another major ecological critique of the farmed-salmon system deals with the salmon feed. Salmon are carnivorous and require huge amounts of other fish (mostly sardine, mackerel, and anchovies) for food in the form of

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pelletized fish meal. The feed conversion ratios are about 10 to 1, 10 pounds of feed fish for 1 pound of salmon. It takes about 4 pounds of fish meal to produce 1 pound of farmed salmon. Mining the oceans for feedfish is a major component of the unsustainability of cage-raised Atlantic-salmon production (Staniford, 2005; Wilkinson, 2006). Shortages of fish meal have constrained farmed-salmon production in the face of growing demand (Roach, 2006; World Bank, 2005). There is no suitable substitute for the oily feedfish. Efforts to replace fish meal with other proteins, such as soybeans, have proven unsuccessful regarding taste and omega 3 deficiencies. According to Jerry Leape of the National Environmental Trust, cage-raised salmon are the ‘‘hogs of the sea. They live in the same sort of conditions, it’s just in water. They pack them really close together; they use a lot of prophylactic antibiotics, not to treat disease, but to prevent it. There’s lots of concentrated fish waste, it creates dead zones in the ocean around the pens’’ (Fishman, 2006b, pp. 3–4). The confined animal feeding operation (CAFO) structure of the farmed-salmon enterprise ‘‘has been singled out as the Achilles heel’’ of the system (Wilkinson, 2006). Although salmon aquaculture has been promoted as a means for generating socioeconomic development, the intensive nature of industrial systems in combination with tendencies toward consolidation tends to result in a decrease in jobs and lower-paying jobs over the long run. This process has been enhanced by a general slowing of industry expansion in the north and concomitant increase in the south. Maine’s industry contracted in the 1990s due to declining salmon prices and overseas competition. U.S. production in Maine and Washington State remained stable in the early 2000s, but due to the expenses of getting new permits was not expected to expand (Seafood Business Magazine, 2003). While Norway is fortunate to be near major markets, it has high production costs. Chile is far from major markets but has lower costs of production, especially labor costs (Pedersen, 2006). In the 1980s the Chilean government targeted farmed-salmon as part of an export-oriented industrialization model of development (Schurman, 1996, 2001, 2003). This action accelerated Chile’s growing dominance in the industry. Between 1993 and 2003 Norway’s farmed-salmon industry grew threefold, but Chile’s increased by nearly 20 times to account for 35% of global production, compared to 37% for Norway (Reuters, 2003). With a 30% growth over the previous 16 years, by 2007 Chile accounted for about 38% of worldwide sales. During this period the Norwegian share of the market fell from 51.5% in 1990 to 39.7% in 2006 (Pallisgaard, 2007). A statement from AquaChile, the second largest farmed-fish company in Chile, noted that Chile would pass Norway as the world’s largest producer soon

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(Weatherby, 2007). Over this period global capital investment in salmon production shifted from the higher costs regions in the north to lower cost areas in the south. In response to growing global competition from Chile and the associated efforts to cut costs, in the 1990s jobs related to caged-salmon production in Norway declined by almost 20%, as production more than doubled. Chile’s rapid rise as the second largest producer of farmed salmon led to falling prices and bankruptcy for many Norwegian producers. The rise in cage production in Chile also negatively impacted the capture fishermen along the Pacific Coast of North America. Representatives of Alaska noted that increased trade of farmed salmon from Chile negatively affected coastal communities that depended on capture salmon for their livelihoods (Langman, 2002). Many fishing operations lost significant sums of money or went out of business (White et al., 2004). The restructuring of the farmedsalmon value chain toward Chile marginalized both capture and cage producers in the north. Although farmed-salmon companies suffered from low prices in the early 2000s, they weren’t complaining in the late 1990s when prices averaged $3.50 a pound. These high prices (one Chilean farmer called them ‘‘the gold years’’) led to production increases in 2001 and 2002; the overproduction generated depressed prices. The lower prices were a ‘‘bonanza’’ for the buyers and retailers who had embraced farmed salmon and shrimp as the preferred source of fresh fish products (Seafood Business Magazine, 2003). They ‘‘have committed themselves heavily in the promotion of these markets, based largely on fish farming both in the North and the South’’ (Wilkinson, 2006, p. 146). Supermarkets and chain restaurants are crucial to the development of farmed salmon as both a center of the plate and sandwich item for northern consumers. The low prices prompted the Outback Steakhouse chain to sign a contract for 2 million pounds of fresh salmon in early 2002. Costco, the largest club store chain in the United States, reported that sales of fresh farmed fillets had increased about 30% annually to more than 30 million pounds a year – or 600,000 pounds a week. At a typical retail price of $3.79 a pound, Costco enjoys above average margins on salmon. ‘‘By locking in a low contract price and keeping the retail price the same, salmon is saving supermarket seafood departments. The seafood buyer for one national chain says he immediately added $1 million to his department’s bottom line this year in just one quarter when he signed a fresh fillet contract for $2.40 a pound’’ (Seafood Business Magazine, 2003, p. 1). Supermarkets’ leading role in popularizing farmed salmon is a ‘‘clear confirmation of the way retail is currently piloting changes in the

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global organization of agrofood systems’’ (Wilkinson, 2006, p. 150). The low prices due to overproduction combined with large-quantity contract sales facilitated a shift in power along the value chain downstream toward the retailers. In response to the low prices of the early 2000s and the growing power of the retailers, the industry consolidated through mergers and acquisitions to cut costs and increase efficiency in order to survive in business. Smaller firms either went out of business or were absorbed by larger firms with greater economies of scale. As John Taylor, the Toronto-based president of Stolt Sea Farm’s North American operations, commented, ‘‘If you’re not one of the top five companies in this business, you’re not going to be successful. You can’t stand where you are without sliding backwards. Look what happened in the poultry business, it’s the same thing. We’ll continue to expand aggressively’’ (Redmayne, 2000, p. 1). Through horizontal integration, by 2005 about one-half of total farmed-raised salmon capacity was controlled by leading global firms (World Bank, 2005). Greater efficiencies were also gained through vertical integration as fish farming attracted global animal feed firms such as Ralston Purina and Nutreco, along with other upstream inputs and genetics companies such as Monsanto. Like poultry and hogs, salmon are value-added feed and the commodity of the commodity chain. Nutreco (Marine Harvest) is the world’s leader in fish farming; it also has significant investments in poultry and hog feed. Fish farming provides valuable new markets for global agrifood TNCs in the area of genetics, inputs (such as disease control), and feed. A major factor in the merger-mania on the farmed-salmon production side is the similar consolidation in food retailers, the fastest growing market for farmed salmon. ‘‘The big chains want big volumes of fresh farmedsalmon filets 52 weeks a year, and they want contract pricing. You have to be a big producer to do that,’’ said Jim Craig, head of Marine Harvest’s North American sales operations (Redmayne, 2000, p. 2). Craig noted that farmed salmon was the dominant seafood product with about 22% of all retail-seafood-counter dollars. In 2000 Costco sold about 10 million pounds of farmed-salmon fillets in its stores in North America. As illustrated by the statements of the farmed-salmon company officers, industry consolidation through horizontal and vertical integration was a necessary strategy to counter the growing power of the retailers. Another response to the growing power of retailers and consumes is a shift by the farmed-salmon industry from a cost-efficient to a consumer-oriented focus. ‘‘The consumer’s interest in the origin of products, the environmental impacts of the industry and the ethical aspects of production are increasingly

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being taken into account,’’ stated Helga Pedersen, Minister of Fisheries and Coastal Affairs of Norway (Pedersen, 2006, p. 1). For the industry to continue to expand, customers’ expectations need to be met. Furthermore, when situations arise that call into question aspects of industry, we need to ‘‘answer accurately’’ and be able to document scientifically every stage of the production process. In recent years environmental and social concerns have prompted the global salmon industry to address these issues. For example, in October 2006 more than 200 environmental and consumer organizations in six countries that produce farmed salmon launched a ‘‘global week of action’’ to protest and raise awareness on the abusive practices of the salmon industry. The ‘‘Farmed Salmon Exposed’’ campaign charged the industry with polluting waters, decimating feedfish species, and – in Chile – exploiting workers with unhealthy working conditions and low wages. ‘‘Globalisation has created enormous economic opportunities for our country. However, this bonanza has not been accompanied by the expansion of worker’s rights and environmental protection,’’ said Pizarro of Fundacion Terram of Chile (Estrada, 2006, p. 1). In 2007 the ‘‘Pure Salmon Campaign,’’ a project of the National Environmental Trust with partners in the United States, Canada, Europe, Australia, and Chile, organized to address the environmental and social problems of farmed salmon and improve the way salmon is produced (Weatherby, 2007). The case of the rapid growth of the industry in Chile provides an excellent opportunity to document these contradictory dimensions of global capital mobility.

Farmed Atlantic Salmon in Chile The salmon industry was attracted to Chile because of its weak environmental and health standards and the lack of regulatory enforcement. (Weatherby, 2007)

The historical development of the farmed-salmon industry in Chile can be divided into three phases (Campos, 2006; Katz, 2007). The ‘‘initiation stage’’ (1974–1985) was supported by government programs to exploit the natural comparative advantages of Chile regarding farmed salmon. This phase was characterized by trial and error experimentation, mostly by small- to medium-sized Chilean-owned companies. The goal to develop a working production system to fatten and export the salmon was reached in 1985 when 900 mt of farmed-raised salmon were produced and exported. In the ‘‘maturity stage’’ (1986–1995), the industry expanded quickly as several domestic and foreign production, supply, and service companies invested in

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the business. This process resulted in the formation of a strong sectorspecific industrial cluster. Several farmed-salmon companies formed an export company to enhance industry visibility and capture global market share. This phase ended in 1995 with the Asian financial crises and dumping charges by U.S. producers. The ‘‘globalization stage’’ (1996 – present) is characterized by extensive vertical and horizontal integration. During this period a series of mergers and acquisitions, changes in plant ownership, and FDI led to increased economic concentration and the growing dominance of a few large firms linked directly to major global retailers. Over the three phases farmed-salmon exports increased from $50 million in 1989 to $1.2 billion in 2003; from about 2% of global production to one-third. By the 1990s the Chilean farmed-salmon industry had attained many of its present day features as a ‘‘mature oligopoly’’ characterized by capital intensiveness, technological sophistication, large-firm size, increased concentration, and global competitiveness (Campos, 2006; Katz, 2007). Salmon farming began in Chile in 1974 when Domsea Farms Chile, a subsidiary of Union Carbide, started production at the island of Chiloe in the 10th Region (Campos, 2006; World Bank, 2005). The large-scale salmon farming that began in 1982 in the 10th Region was supported by a business incubator program called Fundacion Chile that believed Chile’s natural comparative advantages ‘‘could make it a big success in commercial salmon farming’’ (Smith 2005, p. 1; World Bank, 2005). The freshwater lakes for raising smolt and the 6,000-plus miles of coastline that did not freeze in the winter allowed salmon grown in Chile to mature six months faster than in Norway. A joint venture between the Chilean government and the Canadian International Development Agency created several private firms managed by a Canadian consulting company (Paley & Dubois, 2006). Fundacion Chile set up several companies in smoltification and salmon farming (Bjorndal & Aarland, 1999). In 1981, Fundacion Chile bought Domsea Farms and created Salmones Antarctica SA, the first farmed-salmon company to exceed 1,000 tons of production. In 1988 Salmones Antarctica SA was bought by the Japanese company Nippon Suisan Kaisha for $22 million (Smith, 2005; World Bank, 2005). Farmed-salmon companies such as Salmones Antarctica SA, Salmones Huillinco SA, and Salmontec SA were all started by Fundacion Chile and then sold to private owners (Bjorndal & Aarland, 1999). Fundacion Chile was created in 1976, three years after the military coup that ousted President Salvadore Allende. The new Pinochet regime adopted an ‘‘export-oriented industrialization’’ strategy based on comparative advantage and liberalized FDI policies (Schurman, 2003). As part of this strategy to support technology transfer, it persuaded the Innovation and

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Technology Transfer Corp. to use part of the $100 million settlement granted by the regime as compensation for the 1971 expropriation of Chile’s national telephone company to set up the business incubator, Fundacion Chile, for private sector startups (Smith, 2005). Fundacion Chile has been very successful at boosting exports of fruits, lumber, and fish products, especially farmed salmon. As the Chilean capture-fisheries industry declined in the late 1980s due to a crisis in international prices and overfishing, the farmed-salmon industry expanded and provided employment for the disposed fish-processing workers. In fact, salmon farming provides more secure year-round production and employment, as compared to the seasonal capture-fisheries industry (Schurman, 2003). Several sons of business families researched the farmed-salmon systems, moved to southern Chile, and established salmon farms; others invested in the fish meal industry. Although there was no history of salmon aquaculture in Chile, the businessmen had an entrepreneurial spirit and there was cheap labor and a cheap environment (Fishman, 2006b). These operations often pooled and coordinated their activities to achieve economics of scale and expanded their operations rapidly, mostly out of savings (World Bank, 2005). In 1986, 17 national producers formed the Chilean Association of Salmon and Trout Producers to support marketing and quality efforts designed to capture market share dominated by northern countries. Fundacion Chile oversaw the development of a ‘‘quality seal’’ that facilitated the export of a standardized commodity called ‘‘Chilean farmed salmon’’ (Campos, 2006). In this early phase of the farmed-salmon, exportoriented venture, local capital was the still the majority investment source (Schurman, 1996). The salmon farms were called the ‘‘salmoneras.’’ The southern coast of Chile is a perfect environment for salmon farming. It is like Norway’s fjords with ample supplies of cold water in protected fjords. Freshwater lakes for smolt raising are numerous and nearby. The crucial ingredient, salmon feed made of fish meal and fish oil, is sourced from the waters of northern Chile. An abundant supply of cheap labor is available (Kofman, 2007). The production costs for farmed-raised salmon in Chile were only one-third of international prices in the late 1970s and early 1980s. These aspects make it one of the best salmon-farming locations in the world. As noted above, global market share rose rapidly at the cost to other farmed-salmon producing regions as the global farmed-salmon value chain shifted to the south. In 1997, The United States charged the Chilean industry of dumping. Eight salmon farmers from Maine, New Hampshire, and Washington accused Chile of dumping farmed Atlantic salmon into the U.S. market

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(Bjorndahl & Aarland, 1999; Katz, n.d.). The group presented the charges to the U.S. Department of Commerce and the International Trade Commission. They provided proof that the Chilean industry was receiving help from the government to sell their products at below the costs of production. The charges named nine Chilean companies: Pesquera Mares Australes, Eicosal, Marine Harvest, Aguas Claras, Pesquera Camanchaca, Pacifico Sur, Aquasur Fisheries, Chisal, and Cultivos Marinos Chiloe. In 1998 the U.S. Department of Commerce determined that three of the five firms investigated were dumping. Anti-dumping duties were imposed on the offending firms. Industry sources commented that the average ‘‘tariff of 4.5 percent was hardly a deterrent’’ (Seafood Business Magazine, 2003, p. 1). The Chilean industry united to fight the dumping charges, resulting in greater cohesion in the industry (World Bank, 2005). The comparative advantage for Chile attracted significant entry during the 1990s as several domestic and global firms established farmed-salmon operations (Bjorndal & Aarland, 1999). Foreign capital flooded into Chile (Paley & Dubois, 2006). As production soared, a downturn in farmedsalmon prices in the 1990s led to mergers and acquisitions in an effort to lower production costs and maintain market share. In response to these conditions, Chilean salmon farmers ‘‘transformed themselves into aggressive global marketers’’ and expanded their focus on value-added products (Schurman, 2003, pp. 40–41). Dropping freight rates supported Chile’s increased access to northern markets. Many family-based operations left the industry due to lack of technology and resources to compete globally. Some of the leading European and Canadian firms such as Unilever of the Netherlands, BP Nutrition (a subsidiary of British Petroleum), and the Western Group of Vancouver, Canada acquired these smaller firms as their entry into Chile (Luxner, 1994; World Bank, 2005). By the end of the decade, the Norwegians were the leading ‘‘global producer of farmed-raised Atlantic salmon and were buying up major Chilean salmon operations’’ (Phyne & Mansilla, 2003, p. 108). By mid-2001 over $150 million in investments were announced by TNCs expanding in the 10th and 11th Regions. Firms such as Mitsubishi, Nippon Suisan Kaisha, Fjord Seafood, Pescanova of Spain, Marine Harvest, and others were investing in or expanding their operations (Ecoceanos, 2001). In 2002 there were about 60 national and international fish firms operating in Chile (Langman, 2002); about 36% of ownership was foreign capital (Campos, 2006). As the farmed-salmon global value chain shifted south, northern TNCs took advantage of Chile’s liberal FDI policies and invested to secure their lowcost production platforms.

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To increase efficiency and competitiveness, the large firms engaged in a vertical-integration strategy that incorporates feed mills, egg supplies, smolt-rearing, cage raising, processing, and transportation. Through horizontal integration, the number of firms in the industry declined but the total output increased (Campos, 2006). With the significant investment the number of fish-processing plants (both capture and farmed) increased from about 75 to over 400 from the mid-1970s to the mid-1990s. Supported by similar investments, by 1994 Chile was the world’s largest producer of fish meal, the major ingredient and cost of farmed-raised salmon. For example, Nippon Suisan Kaisha, the owner of Salmones Antarctica and Emdeped, expanded their investments in fish meal operations, as did the Norwegian firm Ewos Chile, the Danish firm Biomar, and the Chilean firm Salmonfood (Ecoceanos, 2001). During the same period fish exports rose from negligible levels to about 12% of Chilean export earnings (Schurman, 2003). While fish export sales began through agents and some collective marketing, by the late 1990s the industry ‘‘had graduated to direct sales to large international retailers such as Wal-Mart’’ (World Bank, 2005, p. 2). The value chain was becoming rationalized and dominated by large production and retailing firms from the north sourcing Chile as the lowcost production site. The biggest importers of Chilean salmon are Japan and the United States. In 2001 Chile had about 70% of the Japanese and 45% of the U.S. farmedsalmon market. Sushi destined for Japan was the biggest export (Franklin, 2001). Chile’s extreme dependence on the United States and Japanese markets make it ‘‘vulnerable to international economic trends and trade policies’’ (Bjorndal & Aarland, 1999, p. 248). Chile exports over 80% of its fresh, farmed Atlantic salmon to the United States. Because it is outside of NAFTA, Chile is vulnerable to protectionist policies. Japan is the world’s largest fish market and the most important market for Chilean salmon. The Japanese prefer other species of salmon and other product types (sushi). The Asian economic crisis highlighted Chile’s vulnerability on so few exports markets (Bjorndal & Aarland, 1999). In the 1990s nearly all of the production of farmed Atlantic salmon, the commodity exported fresh to the United States, occurred in the 10th Region (Bjorndal & Aarland, 1999). The fresh salmon was first packed with flaked ice in styrofoam boxes, trucked overnight in refrigerated containers over 600 miles north to Santiago (a 12-hour trip), and flown to Miami. With the addition of an airport at Puerto Montt, the capital of the 10th Region and ‘‘Salmon Capital of Chile,’’ the salmon was flown directly from Puerto Montt to Miami. The product was on ‘‘U.S. supermarket shelves and

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restaurant tables within three to four days from harvesting’’ (Luxner, 1994, p. 3). Over the period 2000–2005, fierce competition drove down costs and led to a consolidation in the industry driven by large international producers (Harris, 2007). According to AquaChile, the 10 leading exporters increased market share from 57% to 74% during this period. In 2004 the industry leader in Chile was Marine Harvest, the fish-farming division of Nutreco of the Netherlands, the world’s largest farmed-salmon producer. Marine Harvest had 11.2% of Chilean exports (see Table 1). It controlled 41 cultivation centers (farms) and one processing plant. AquaChile is second largest. If AquaChile’s subsidiary, AquaClaras (4.4%), is added to AquaChile’s share (8.8%), then AquaChile becomes the largest exporter (13.2%) (Harris, 2007). AquaChile is owned by a holding company of U.S. and Chilean capital (Campos, 2006). Pesquera Camanchaca is third largest and Chilean-owned. MultiExport is number four and is a strategic partnership between Chilean and Japanese owners (Groupo Mitsui Co., Ltd.). Mainstream Chile is fifth and Fjord Seafood is sixth largest, both Norwegian-owned (Campos, 2006). Several other major firms are subsidiaries of European and/or Canadian corporations. The industry also expanded through vertical integration in an attempt to control feed costs and extract maximum value. Nutreco’s feed division, Skretting, opened a large salmon feed plant in southern Chile to supply

Table 1.

Marine Harvest Chile AquaChile Pesquera Camanchaca MultiExport Mainstream Chile Fjord Seafood Chile Cultivos Marinos Chiloe Pesquera los Fiordos Salmones Antarctica Aquas Claras Stolt Sea Farm Chile Others Total Source: Harris (2007).

Chile’s Main Salmon Exporters – 2004. $USK

Market Share (%)

Metric Tons

Market Share (%)

160,502 126,523 99,669 95,139 88,507 75,330 74,529 65,957 63,884 63,125 54,893 471,335 1,439,393

11.2 8.8 6.9 6.6 6.1 5.2 5.2 4.6 4.4 4.4 3.8 32.8 100

36,376 32,634 20,453 21,582 25,091 19,115 19,115 19,908 14,972 12,506 13,128 111,616 354,739

10.3 9.2 5.8 6.1 7.1 5.4 5.4 5.6 4.2 3.5 3.7 31.5 100

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Marine Harvest’s and other companies’ needs. The fifth largest firm Mainstream Chile is owned by Cermaq of Norway, which claims to provide feed to one-half of the world’s salmon; Mainstream Chile controlled 21 cultivation centers. In 2004 four of the five largest fishfeed companies in Chile were Norwegian or Dutch owned (Campos, 2006). Vertical integration not only helps control costs but also is essential in quality control of valueadded products. Victor Puchi, president of AquaChile, commented, ‘‘To develop the type of products that the market wants, we need to invest in product development but we don’t want to depend on third parties; we prefer to control the whole production chain to ensure product quality’’ (Harris, 2007, p. 3). This process of industry consolidation through horizontal and vertical integration orchestrated by farmed-salmon TNCs illustrates well production capital mobility. According to AquaChile, further consolidation is necessary to increase efficiency but more importantly, to ‘‘step up their bargaining power with large retailers’’ (Harris, 2007, p. 3). ‘‘Consolidation is important because the distribution network is consolidating, we have to deal with larger players and, to do this, we have to gain size in order to be respected,’’ said Puchi of AquaChile (Harris, 2007, pp. 3–4). ‘‘What we need now is a structure where the four main players have 70% market shares so that they can put money into communications, if we can get there, the industry will continue to achieve strong growth,’’ predicted Puchi (Harris, 2007, p. 4). ‘‘You need size to invest in marketing; today it’s very important to stay in constant contact with consumers, providing positive messages about food safety and the advantages of the product for health,’’ noted MultiExport’s Jose Ramon Guitierrez (Harris, 2007, p. 4). ‘‘People are going to eat more salmon because they recognize it as a health product,’’ says Pesquera Camanchaca’s Jorge Fernandez (Harris, 2007, p. 4). But quality is a two-edged sword. ‘‘Any accident regarding quality means that we pay a high price,’’ warned Puchi of AquaChile (Harris, 2007, p. 4). Standards and certification are seen as the best path to ensure long-term quality and consumer satisfaction. In April 2005, Wal-Mart began to demand that six Chilean salmon suppliers be certified under the ‘‘code of good environmental practice’’ developed by Fundacion Chile. ‘‘North American retailers are supporting the unification of norms to form an international certification agreement,’’ said Fernandez of Pesquera Camanchaca (Harris, 2007, p. 4). In response to environmental criticisms, an environmental agreement called the ‘‘clean production agreement’’ was reached in 2003 that covered production in the 10th and 11th Regions. Due to the high cost of implementation, participation in the agreement is voluntary but ‘‘it has been

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welcomed as helping to safeguard the industry’s reputation’’ (Harris, 2007, p. 5). Wal-Mart’s demand for environmental accountability highlights the global retailers’ growing power to drive the value chain. In 2005 Chile exported 383.7 mt of farmed salmon worth $1.72 billion, 20% more than in 2004. In 2006 total production was worth $2.2 billion (WWF, 2007a); 80% came from the 10th Region and the remaining portion from the 11th Region (Estrada, 2007). By 2003 the 10th Region around Puerto Montt had reached maximum capacity at about 800 salmon farms. The industry is now expanding in the 11th Region called Aysen. In 2007 there were about 1,000 salmon farms along the entire coast (Kofman, 2007). The expansion in the 11th Region is constrained by lack of infrastructure, particularly roads and airports. Although the pristine waters of the 11th Region have attracted some of the world’s fishing giants, the expansion has produced growing criticism due to potential environmental impact to an area famous for its tourism (Reuters, 2003). The farmed-salmon industry in Chile has experienced phenomenal growth. Over the last decade the industry grew at an average annual rate of 22%. The farm-salmon sector contributes 4% of total exports and 56% of fishing exports in Chile. It provides work to 53,000 people directly and indirectly in Chile (Varas, 2007). In 2006 salmon became the second largest export in Chile, behind copper and ahead of fruit. The salmon is harvested, processed, and flown to the United States in under 48 hours (Fishman, 2006b), a significant compression of the time from production to consumption. While the industry has advanced exponentially in Chile, it still is dependent on Europe for state-of-the-art technology. The industry is organized by the trade association, SalmonChile, which coordinates the farmed-salmon cluster made up of farming companies, drug laboratories, container manufacturers, hatchery facilities, feed suppliers, and transportation services. SalmonChile is also the major public relations entity (Paley & Dubois, 2006). In support of current technology adoption, Fundacion Chile and other organizations sponsor trips to view the technologically more sophisticated farmed-salmon operations in Norway and Scotland to gain access to advanced production techniques. Much of the industry is still dependent on imported salmon eggs. Firms like Monsanto also provide upstream inputs such as disease control and genetics (Wilkinson, 2006). Chile’s ‘‘world class industry continues to depend on imported machinery and equipment and disembodied know-how developed overseas’’ (World Bank, 2005, p. 4). Although Chile is the production platform, it is easily evident that the dominant players in the global value chain are actors from the north.

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In summary, the major contributing factors to the success of the Chilean farmed-salmon industry are the naturally favorable conditions, the availability of risk capital, low labor costs, local provision of fish meal, lenient FDI policies, and only favorable intervention by the government. These factors attracted northern capital that over time came to dominate the industry. Through the 1990s the industry preferred and secured a system of self-imposed regulation. As long as severe economic or environmental crises didn’t manifest, this course was likely to continue (Bjorndal & Aarland, 1999). In recent years, growing environmental and social crises prompted a change of course to address emerging legitimating issues. The standards and certification process mentioned above is a case in point, as is the voluntary clean production agreement of 2003. The increasingly bad press brought unwelcome attention to the industry as it illuminated the environmental externalities and social inequalities along the global value chain.

Legitimating Crisis and Resistance It is very difficult to criticize the salmon industry. If you oppose it you become an enemy of the state. (Marcel Claude, a Chilean economist who founded the non-profit environmental think tank Terram Foundation [Franklin & Woods, 2002, p. 1]).

The capital-accumulation strategies of the salmon TNCs based on production capital mobility and global sourcing were successful at generating substantial profits. But, the Chilean farmed-salmon industry generated increasing criticism related to environmental and workers’ rights issues. Environmentalists and labor activist social movement activity mobilized to challenge the industry, asserting that it was an illegitimate form of socioeconomic development with unacceptable negative impacts. In response to the escalating concerns, the Lower House of the Chilean Congress held hearings in 2007 to discuss the environmental conditions and labor violations and concluded to conduct a 90-day investigation (Estrada, 2007).

Labor Issues While the seafood industry thrived, most of the workers did not benefit significantly. Plant owners commented that ‘‘manual labor doesn’t cost a thing in Chile’’ (Schurman, 2003, p. 37). The labor law put into place by the Pinochet regime discouraged unionization. State repression of labor unions following the 1973 coup was severe and workers were afraid to unionize.

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Union organizers were harassed and/or expelled from the plants to the point that people didn’t complain about wages in fear of being fired (Schurman, 2003). Some moderate successes in union organizing did occur in the late 1980s. As prices dropped and competition increased in the late 1990s, Chilean producers expanded their sales campaigns in the north and adopted a strategy of piecework in the processing plants to try to boost productivity. Instead of being paid by the hour, workers were paid for each fillet of salmon they produced. Paying workers by the piece did significantly increase the take-home pay of some workers, but as one worker noted, ‘‘You’re earning money against your body, but after a while, your body collapses’’ (Schurman, 2003, p. 41). Some firms also increased the work pace, which has negative impacts on worker health. Unskilled workers soon outnumbered skilled workers by seven-to-one. The increased use of labor market flexibility ‘‘has been highly detrimental to the seafood processing workers’’ (Schurman, 2003, p. 41). Schurman notes that even as the plight of the workers has improved since the transition to formal democracy in Chile, the state continues to support flexible labor policies. The farmed-salmon processing plants are modern and operate on an industrial system, but the workers face a demanding pace for long hours using razor-sharp filleting implements at low pay (Fishman, 2006b). Deaths, abortions, and serious labor rights violations are common in Chile’s salmon industry (La Nacion, 2006). Workers are often paid less than the minimum wage. Many processing workers earn $200 per month or less, while similar workers in Norway earn 378% more (Estrada, 2007). Half are not members of a trade union, three-quarters do not have disability insurance, and half do not have life insurance (PSC, n.d.). Jose Ramon has worked 10 hours per day, six days a week, for five years. He received $170 per month, $20 more than minimum wage. ‘‘They treat us like slaves,’’ said Ramon. ‘‘And if we are sick, or late, or take breaks, we get a cut in pay’’ (Langman, 2002, p. 2). Despite the modern technology, there are similarities to the sweatshops more commonly associated with developing countries, says Rodrigo Pizarro, executive director of the Fundacion Terram, a nongovernmental organization in Chile. Salmon farming pulls rural people out of subsistence agriculture and into the processing plants. Most of the processing plant workers are women who face repetitive motion injuries and strict labor control policies (Estrada, 2007). ‘‘There are a lot of women working in the processing plants. There are a series of issues in terms of sexual harassment, in terms of hours standing up. They are not allowed to go to the bathroom. And there are antiunion practices,’’ says Pizarro (Fishman, 2006b, p. 4).

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Beyond the weak labor standards, policies that did protect workers are hard to enforce because the plants were so far away from Santiago. For example, in 2001, 433 out of the 560 workers at a Marine Harvest processing plant went on strike to protest low wages. The majority of the employees (80%), mostly women who earned about $130 per month, demanded a $15 per hour per month increase. In response, Marine Harvest fired 55 workers. In 2002 the Chilean government found Mainstream Chile, the subsidiary of Cermaq of Norway, guilty of a series of labor law violations. It was fined at least 13 times for failing to issue protective equipment to workers, failing to provide employment contracts to workers, requiring seven-day work weeks, and illegally suspending Mainstream Chile’s first legally elected union leader (PSC, n.d.). Other allegations against Mainstream Chile included the miscarriage by a young worker after being required to work an 11-hour night shift in violation of Chilean law regarding treatment of pregnant workers, and a diver’s death due to lax safety standards. The situation facing the divers who work on the salmon pens provides another example of labor force marginalization. In August 2005 a government labor inspector fined Marine Harvest for the death of a diver working as a subcontractor repairing antipredator nets around the salmon pens. Juan Miranda died from a heart attack while resurfacing after a maintenance dive. The company did not have the required emergency plan for work-related injuries. During the same month another worker died because he had not been issued a life jacket (PSC, n.d.). While Marine Harvest offered its regrets, it maintained that Miranda’s death was due to him not following the correct decompression procedures for surfacing from dives. Representatives from industry critic Oceana Foundation countered that divers are often required to descend up to 65 m to clean the salmon cages, 45 m more than their authorization. Additionally, over half of the divers in aquaculture are subcontractors without unions. Seven divers died in the first nine months of 2005 (Dingle, 2005). During 2005 the Oceana Foundation released its report, Salmon culture and human rights: Systematic violation. The report concluded that the farmedsalmon industry violated constitutional standards in seven areas (Gonzalez, 2005), including restrictions on freedom to organize unions, wage discrimination, and violation of rights of indigenous peoples and women. The Barcelona-based NGO Veterinarians Without Borders stated that Chile’s farmed-salmon industry was not sustainable as it was based on monoculture and labor exploitation. ‘‘Out of every 100 dollars of Chilean-salmon exports, just 4.5 are for the worker salaries, 42 go to the company, 27 to the fish feeding costs, 12.5 to marketing costs, seven to other infrastructure expenses,

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and 3.5 dollars to replaying loans,’’ said the NGO (Gonzalez, 2005, p. 1). Oceana points out that the worst deeds affect the pregnant employees as they are often beaten, mistreated, and degraded to force them to work longer than the legal hours and thereby denied their basic rights to work in a safe workplace, have adequate periods of rest, and the freedom to unionize. Industry representatives rejected the report as a biased and unsubstantiated ‘‘pseudo-study’’ that unfairly criticized the farmed-salmon industry. Levels of labor law violations on salmon farms have risen in recent years. In 2006 four salmon companies – Marine Harvest (Nutreco), Los Fiordos, Cultivos Marinos, and AquaChile – were fined U.S.$29,393 for not meeting labor laws regarding hygiene, security, and working-day regulations in Puerto Cisnes in the 11th Region (SFM, 2006). AquaChile is the largest in the country and second largest in the world (Estrada, 2007). In 2007 AquaChile workers protested labor and health conditions with a two-week strike where they demanded a $50 per week raise; they got a $7 per week raise. The director of the Working Environment and Conditions of Chile’s National Labor Directorate noted ‘‘that transnational corporations operating in Chile must comply with relevant national laws and adhere to global standards and guidelines, but they often fail to do so’’ (Weatherby, 2007, p. 2). About 40% of salmon-farming companies are multinational, of these 60% are Norwegian (also the Netherlands, Canada, Japan, and Spain) (Estrada, 2007). There were 38 salmon industry-related deaths during 2006–2007 and an involuntary homicide trial against two senior executives of Marine Harvest (the diver death detailed above). According to Ecoceanos, the deaths ‘‘have occurred in the context of permanent anti-union practices and labor law violations by the salmon industry employers’’ (SFM, 2006, p. 2). In October 2006 the ‘‘Farmed Salmon Exposed’’ campaign organized to pressure the salmon industry to comply with labor and environmental laws, to improve workers’ rights so they approach international standards, and to establish land-use laws that allowed better planning of coastal areas (Estrada, 2006). The campaign included a picture of the four members of the Chilean rock band, Chancho en Piedra, seated at a long table piled with salmon with a legend under the picture, ‘‘Let salmon not be our last supper; Let’s globalise rights too’’ (Estrada, 2006, p. 1). Three questions were listed under the legend: (1) Do you know that the man and women who work in the salmon industry in Chile have longer working hours and earn as much as eight times less than their counterparts in Norway; (2) Did you know that the environmental impact of salmon farming is equivalent to pouring organic waste from seven million people in to the waters off the southern coasts of Chile; and (3) Did you know that in a world where hunger still

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exists, producing one kilo of salmon takes nine kilos of jurel or sardines (Estrada, 2006, p. 2). The evidence presented above illustrates the precarious situation that farmed-salmon production and processing workers face in Chile. It also shows how NGOs have mobilized to publicize the injustice and encourage the state to mediate the controversy. Schurman (2003) is less hopeful about substantive state intervention in favor of the laborers. She concludes that in line with the neoliberal framework of globalization, ‘‘neither the state nor the labor unions are in a position to protect the workers from changes in the global industry conditions’’ (Schurman, 2003, p. 41).

Environmental Issues In addition to the mounting charges of labor abuse, social movement activities emerged to challenge the environmental damage associated with salmon farming. In 2003 Chilean conservation groups rallied against the uncontrolled growth of salmon farms that polluted hundreds of miles of coastline and once-pristine lakes. They feared that the environmental degradation that limits expansion in the 10th Region would develop in the 11th Region (Reuters, 2003). Critics noted that sea lions that prey on the salmon pens are often killed by company employees and dolphins are less numerous due to the polluted waters (Langman, 2002). Juan Carlos Cardenas of the environmental group Ecoceanos warned that salmon farming was dangerously unsustainable and represented the ‘‘tip of the spear’’ for extractive industries looking to exploit the Chilean Patagonia. Cardenas stated that while environmental legislation was passed in 2004 to regulate the industry, the Chilean state does not commit adequate resources to monitor the entire industry (Paley & Dubois, 2006). In 2005 U.S. businessman and ecologist Douglas Tompkins launched a campaign to freeze farmed-salmon expansion in Chile citing extensive environmental damage beneath the pens (Dingle, 2005). Local industry and politicians quickly rebuked his remarks as ill informed and unsubstantiated. Tompkins replied that his research clearly showed extensive ecological contamination below the pens. Chilean environmental activists supported Tompkins, claiming that disease problems due to the confinement monoculture were necessitating the increased prophylactic use of high levels of antibiotics. These charges were presented just days before SalmonChile commended salmon farmers for clean production, according to a voluntary best-management-practices agreement signed in 2003 (preceding text) (Dingle, 2005).

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Besides the environmental problems, product contamination and disease outbreak problems began to surface. In 2004 a shipment of farmed salmon was rejected by the Dutch health authorities because it was contaminated with Malachite Green, an outlawed fungicide; the shipment was routed elsewhere for sale (PSC, n.d.). In September 2007 Taiwanese authorities found Malachite Green in a shipment of salmon imported by a local branch of Costco. After hearing the news, Ecoceanos demanded that the Chilean government take action and bring charges against the offending companies. Representatives of the Pure Salmon Campaign called for criminal charges to be pressed against the violators (Witte, 2007). In response to growing critiques regarding the environmental impact of farmed salmon, in April 2005 Wal-Mart joined forces with Marine Harvest to develop a program to certify Chilean farmed salmon as ‘‘eco-friendly’’ (SFM, 2005). The voluntary certification program was developed by Fundacion Chile, with the assistance of the Production Development Corporation’s fund for development and innovation, Marine Harvest Chile (Nutreco), Patagonia Salmon Farming, and Pesquera Eicosal (Landcatch Chile). Wal-Mart vice president of seafood and deli, Peter Redmond, stated, ‘‘It’s just one of the things we are trying to do to get on the front side environmentally’’ (SFM, 2005, p. 2). This move was seen as a preemptive strategy to address the growing number of environmental and social problems related to Chilean farmed-salmon. Wal-Mart stated that it expects all of the farmed salmon it sources from Chile to be ‘‘eco-certified.’’ In 2006 the environmental question attracted more bad press as the Farmed Salmon Exposed campaign sought to prevent the expansion of the industry into the 11th Region, and thereby protect it from the polluted fate of the 10th Region (Weatherby, 2007). ‘‘The problem is that right now there isn’t any way to control the industry,’’ says Juan Carlos Cardenas, executive director of Ecoceanos, a Chilean participant in the campaign. ‘‘We can say that the salmon industry in Chile is out of control’’ (Kofman, 2007, p. 2). Cardenas notes that Norwegian companies that observe good environmental and labor standards in Norway apply different standards in Chile. ‘‘It’s very funny,’’ says Cardenas, ‘‘because the multinational companies apply a double standard. In their own countries the standards are very high, but in Chile the standard is low’’ (Kofman, 2007, p. 3). In May 2007 Ecoceanos organized a seminar in Puerto Montt on the overuse of antibiotics in the Chilean farmed-salmon industry. It criticized the salmon TNCs for their lack of social, economic, and environmental responsibility. The event was hosted by the Pure Salmon Campaign and the Health Authority of Chile’s Los Lagos Region. According to Ecoceanos,

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Chile uses 75–100 times more antibiotic per ton of fish than Norway. They accuse this practice of resulting in decreased effectiveness of antibiotics in the industry, as well as human health contamination by antibiotic residues in this consumed fish (FishFarmer, 2007). Despite expansion plans, the salmon industry in Chile has not grown in the past three years due to disease outbreaks and parasite infestations (Weatherby, 2007). The Chilean farms are accused of the overuse of antibiotics, to prevent disease outbreaks, which have been banned in the United States and European Union for years. Japan has threatened to ban the import of Chilean salmon due to illegal levels of antibiotic residue in the flesh (Weatherby, 2007). In 2007 an outbreak of Infectious Salmon Anemia (ISA) added to the industry’s problems. ISA is a flu-like disease that spreads easily and quickly. It was first discovered in Norway in 1984, then detected in Canada in 1996 where it devastated New Brunswick’s growing salmon industry. Scotland has also had problems with the disease (Pallisgaard, 2007). In August 2007 the Chilean National Fishing Service (SERNAPESCA) instructed salmon farmers to kill all infected fish to keep the disease from spreading. This initial order applied to fish raised by Marine Harvest. The ISA outbreak reached epidemic proportions in March 2008, again concentrated in the Marine Harvest operations, leading to increased concerns about the future of the industry in Chile (Barrionuevo, 2008). As a complement to the section on labor issues, the evidence presented above highlights the environmental controversies related to farmed salmon in Chile. International and domestic social movement resistance organizations have emerged to bring attention to the growing environmental crisis linked to an industry ‘‘out of control.’’ It appears that the expanded ISA outbreak may portend the end of the profitable days for farmed salmon in Chile, as it did in previous producing regions. As Wilkinson (2006) noted, the CAFO structure of the farmed-salmon enterprise may be the Achilles heel. Marine Harvest, the largest farmed-salmon producer in the world, is in trouble in Chile.

The Marine Harvest Story The Marine Harvest merger consolidates Norwegian dominance over the salmon industry in Chile. (Paley & Dubois, 2006)

Marine Harvest is a Norwegian seafood company engaged primarily in the production, processing, and sale of farmed salmon. It has operations in Norway, Scotland, Canada, the Faroe Islands (part of Denmark near Iceland), and Chile. Marine Harvest assumed its current form in a

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megamerger expansion between Marine Harvest, PanFish, and Fjord Seafood in 2006. The merger created the largest farmed-salmon firm in the world. ‘‘This is an important day for the Norwegian and global fish-farming industry and for Norwegian industry in general,’’ said Atle Eide, CEO of PanFish. ‘‘The combined company creates the strongest unit in the industry and will become a driving force in the continuous development of fish farming, one of the world’s most exciting and fastest-growing food industries’’ (NorTrade, 2006, p. 1). Marine Harvest CEO Hans den Bieman also expressed his enthusiasm for the merger. ‘‘We share the view that a further consolidation on this industry was needed,’’ said den Bieman. ‘‘Norwegian knowledge has always been an important part of Marine Harvest, in addition to our overall global approach. We are excited to join forces with PanFish to form an even stronger fish farming company’’ (NorTrade, 2006, p. 1). Marine Harvest began in Scotland in 1965 as a subsidiary of Unilever of the Netherlands at the outset of the Atlantic salmon farming industry; it started operations in Chile in 1975. After Unilever divested Marine Harvest in 1992, it went through several ownerships and finally the Dutch firm, Nutreco, bought it in 1999. Nutreco acquired several other fish-farming assets, including major interests in Hydro Seafoods with farming operations in Norway and Ireland and processing and marketing activities in France. The Hydro acquisition secured the preferred MOWI breed of Atlantic salmon. By 2000 it was a leading farmed-salmon producer in Scotland and Chile, through its subsidiary Mares Australes. Its Western Canada operations were called Paradise Bay Seafarms. After the merger with Norway’s Stolt-Nielsen in 2005, which also had operations in Chile, Marine Harvest became the largest farmed-salmon company in the world (Marine Harvest, 2006; Wikipedia, 2007). Nutreco Holding N.V., based in the Netherlands, is a world-leading, vertically integrated feed and foods producer (Funding Universe, 2004). Nutreco Holdings is organized under two business divisions: Nutreco Aquaculture and Nutreco Agriculture. Nutreco Agriculture focuses on pork and poultry production and processing, especially feed production. In 2004 Nutreco Aquaculture was the world’s largest aquaculture company. It manufactures fish feed under the Skretting name, operates salmon farms under the Marine Harvest name in Norway, Chile, Canada, Scotland, and Australia, and operates fish-processing plants in Chile, Norway, Scotland, and France. The origin of Nutreco dates back to 1899 and the creation of the agricultural merchant firm Skretting (Funding Universe, 2004). Skretting entered the animal feed business in the 1930s and was the first company to produce extruded fish feed in 1963, which became its sole focus. In response

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to the rise of OPEC and decreasing control of the oil producing regions of the world, in 1975 British Petroleum established BP Nutrition as part of a diversification strategy. BP quickly acquired Trouw Nutrition, an animal feed company established in 1931 in the Netherlands. In 1979 BP acquired the fish and poultry feed business firm Hendrix Voeders established in 1928 in the Netherlands. In 1980 BP Nutrition bought Skretting and established Trouw Chile and the Mares Australes fish-farming company in 1981. In the 1980s BP Nutrition acquired U.S.-based Purina Mills, the Canadian salmon feed firm Moore-Clark, and Spain’s Sada and Nanta. With the Moore-Clark buyout, BP began salmon-farming operations in Canada. It expanded its Chile operations with another acquisition in 1988. In 1994 Nutreco was formed from the management-led $550 million buyout of the BP Nutrition division from British Petroleum (Funding Universe, 2004). At this time, Nutreco was the largest aquaculture company in the world with a 50% share of the worldwide market for salmon and trout feed; it was also the largest animal feed supplier in Europe. In 1995 it developed an organic salmon feed and opened an experimental fishfeed technology factory in 1997. In May 1997 Nutreco went public and launched another acquisition drive. Among the numerous buys were Polfarm, the leading premix feed maker in Poland, and Caicaen, another salmon farm in Chile. In 1999 it bought the Marine Harvest McConnell salmon farming and processing business from Booker PLC, one of the top four salmon producers in the U.K. market. Booker had bought Marine Harvest in 1994 and merged it with its McConnell operations. Two weeks after the Marine Harvest acquisition, Nutreco bought BOCM Fish Feed Group, the number four leading fish-feed firm in the United Kingdom. In 2000 Nutreco acquired most of Hydro Seafood from Norsk Hydro, the world’s largest Atlantic-salmon producer, with operations in the United Kingdom, Norway, Ireland, and France. The British Mergers and Acquisitions Commission barred Nutreco from acquiring Hydro’s U.K. assets, about 20% of total operations. More purchases of feed companies from Belgium, Hungary, Spain, and Norway followed. In 2001 it moved into the U.S. market with the acquisition of Ducoa’s premix operations, the third largest in the United States. Also in 2001 it bought Pivot Aquaculture and Tassal, the leading fish-feed producer and salmon producer in Australia. It also added Agrovic of Spain to its list of companies, giving it the leading position in the Spanish feed market. In 2002 it bought Chisal, a Chilean salmon firm, Selko, an organic feed manufacturer, and started a joint venture for premix feed production in the Hunan province of China. In 2003 all of the fish-feed operations were regrouped under the Skretting name. Its principle

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competitors worldwide include Cargill, ConAgra, ADM, ContiGroup, Perdue Farms, and Charoen Pokphand, among others. From its pioneering days with Mares Australes in Chile, Nutreco built the biggest salmonfarming firm in the world with the acquisition of Marine Harvest McConnell in 1999, Hydro Seafood in 2000, and the merger with StoltNielsen (Stolt Sea Farm) in 2005 (AFX, 2006). Stolt Sea Farm began as a salmon smolt farm in Norway in 1973. In the following 30 years it vertically integrated along the value chain from breeding to value-added products. Production and processing facilities were located in Canada, Chile, Norway, Scotland, Belgium, and the United States. The expansion activities followed a pattern of a combination of organic growth and initial partnerships that were eventually fully acquired. Stolt expanded outside Norway in 1984 with the acquisition of salmon operations in the United States and Canada. In 1994 it bought a minority share of Eicosal salmon farming in Chile; the remaining shares were purchased in 2001. In 1998 it bought Gaelic Seafoods Scotland Ltd. An initial investment in Ocean Horizon S.A. in Chile in 1999 became a full acquisition in 2000 (Marine Harvest, 2006). PanFish Holding ASA, based in Norway, was founded in 1992 with a strategy to acquire fish farms worldwide. When the market price of salmon collapsed in 2001, PanFish faced severe financial problems but slowly recovered by 2005 (Wikipedia, 2007). Fjord Seafood was founded in 1996 in Norway as a single fish farm. It expanded aggressively into a vertically integrated company with 60 fish farms, smolt and brookstock farms, slaughterhouses, and processing plants by 2000. Acquisitions included the Belgian firm Peiters N.V. and ContiSea, the seafood joint venture of ContiGroup and Seaboard Corporation in late 2000. Poor market conditions in 2001 created debt servicing problems; by 2005 it had reestablished its business position. Consolidation in the industry in general, and the Marine Harvest– PanFish–Fjord Seafood merger in particular, was orchestrated by John Fredrikson, Norway’s richest man before he renounced his citizenship in 2006. The activity began in 2005 when Fredrickson’s investment company Geveran Trading bought a 24% stake in Fjord Seafood. At the same time PanFish announced that two companies indirectly owned by Fredrikson had bought a combined 48% of PanFish’s outstanding shares. In March 2006 Geveran Trading bought Marine Harvest and turned it over to PanFish. Geveran also sold its stake in Fjord Seafood to PanFish. Marine Harvest was brought under the control of PanFish by the end of 2006. At the conclusion of the merger, Marine Harvest was owned by Geveran

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Trading, Co. (28.74%); Bank of New York (4.74%); State Street Bank (3.36%); Morgan Stanley (3.00%); Fidelity Funds (2.79%); Folketrygdfondet (2.62%); Mellon Bank (2.21%); Goldman Sachs (2.17%). Geveran Trading, Co. is part of Greenwich Holdings, a company indirectly controlled by John Fredrikson, owner of the world’s largest oil tanker fleet and worth $3.4 billion (Wikipedia, 2007). PanFish adopted Marine Harvest as the name for the combined company and adopted Fjord Seafood’s ‘‘excellence in seafood’’ as the slogan. The salmon feed supply contracts between Marine Harvest and Nutreco’s Skretting were to be continued after the merger (AFX, 2006). After the mergers, Marine Harvest had about 6,000 employees and 30–40% of the worldwide salmon market. It operated salmon farms in Norway, Chile, Scotland, Canada, and the Faroe Islands. Of total sales, 67% are in Europe, 15% in North America, 6% in Norway, and 1% in Asia (Kavanagh, 2006). It is also the largest producer of farmed salmon in Chile and Canada (Kavanagh, 2006). The overall goal of the new company is to be the lowest-cost producer of quality farmed-raised salmon in the world (NorTrade, 2006). Prior to the merger in 2006, Marine Harvest Chile general manager noted that not only does Chile possess natural comparative advantage for farmedsalmon production, its very positive attitude toward foreign investment generates stability for the industry (Johnson, 2006). This is a major reason why Marine Harvest expanded more rapidly in Chile than any other country. In 1992 Marine Harvest Chile produced a total of 2,900 mt of farmed-raised salmon, by 2006 the amount had increased to 72 Kmt, with most of that destined to the United States and Japan. Marine Harvest secures its feed from Skretting, the feed division of Nutreco, Marine Harvest’s parent company. Skretting commands about 35% of the Chilean feed markets. It supplies Marine Harvest and other leading salmon producers. In April 2004, Skretting opened a new (and its largest) plant near Puerto Montt. Johnson (2006) stated that Nutreco had invested a total of $250 million in Chile through both acquisition and new project development. Johnson noted that Marine Harvest Chile and the salmon industry have contributed significantly to infrastructure development such as roads, telephone, and schools; it sponsors the Puerto Montt soccer team. To maintain expected growth rates, Marine Harvest Chile will invest about $9 million annually to open three or four new cultivation centers each year. Additionally, back in the Netherlands they are experimenting with other species that might be better suited to Chile. ‘‘Nutreco is very committed to aquaculture, and we’re not in Chile just for a short stay,’’ Johnson concluded (Johnson, 2006, p. 1).

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After the merger, Andrea Kavanagh of the Pure Salmon Campaign urged John Fredrikson to use his influence to ‘‘transform the salmon aquaculture industry and to turn the tide on efforts to save global wild salmon stocks’’ (Kavanagh, 2006, p. 1). The Campaign challenged Fredrikson to adopt salmon-farming practices that eliminate disease transfer, waster pollution, escapes, and ensure that the fishes used for salmon feed were sourced from sustainable fisheries. Marine Harvest reported that while 2007 second quarter earnings were good, sales were off due to reduced harvests in Chile. The outbreak of ISA ‘‘represents a growing challenge and requires implementation of preventative measures by the entire industry’’ (QFFIN, 2007, p. 1). Marine Harvest noted that it felt that the biological problems could be solved and that together with other firms it had launched a comprehensive program. In response to calls for reform by WWF related to the contamination of the freshwater lakes used for smolt-rearing, Marine Harvest announced that it would ‘‘retire’’ all of its lake concessions in Chile over the next five years and switch over the land-based containment structures for smolt-rearing (WWF, 2007b). The detailed review of the previous companies’ histories illustrates the global reach of the firms involved in the megamerger; furthermore, it documents the numerous ventures into Chile as the mostly European salmon TNCs diversified their production bases through FDI and productive capital mobility. The complicated financing of the merger, including the involvement of numerous banks and investment firms, also reveals the link between financial and productive capital in the construction of global value chains. While Nutreco and Marine Harvest declare their intentions to be in Chile for a long time, the ISA disease outbreak might compromise this position and force relocation to the next pristine environment if they want to keep their contracts with Wal-Mart and Costco.

The Wal-Mart Effect Chile qualifies as one of the Latin American countries ‘‘experiencing accelerated changes characterized by the intensified domination of multinational capital in agriculture.’’ (Fold & Pritchard, 2005, p. 156)

Charles Fishman’s (2006a) book, ‘‘The Wal-Mart Effect,’’ focuses attention on the market power of the largest retailer in the world. As noted above in the case, farmed-salmon industry representatives stated that the consolidation in the industry was in response to the consolidation and power of the global retailers. This section takes a closer look at Wal-Mart as an exemplar of the

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increasing influence of global retailers as drivers of the global value chains. Wal-Mart sells more salmon than any other company in the world and undersells all other retailers. Fishman notes that salmon for $4.84 a pound is a deal that seems to be too good to be true, if not for the consumers, then for someone else. He asks, ‘‘What exactly did Wal-Mart have to do get salmon so cheaply?’’ (Fishman, 2006b, p. 1). The answer to the question takes us to Chile. About 65% of the farmed-raised salmon eaten in the United States comes from Chile, the rest from Canada. The salmon from Chile arrives in the United States fresh, flown in through Miami, and onto consumers’ tables in three days or less (Fishman, 2006b). Wal-Mart obtains all of its farmed salmon from Chile. It is either the number one or two customer of Chilean farm-raised salmon (Costco is the other). According to Fishman, ‘‘Wal-Mart may well buy one third of the annual harvest of salmon that Chile sells to the United States’’ (Fishman, 2006b, p. 2). This kind of focused purchasing is one of the ways Wal-Mart can sell the fresh fillets for $4.84 per pound. It has 1,906 supercenters around the United States. Wal-Mart’s power to remake the operations of its suppliers is unchallenged. This power to reduce prices paid to suppliers and prices charged to customers has changed the way business is carried out in the United States and globally (Fishman, 2006b). Wal-Mart has come under criticism for sourcing its farmed salmon from Chile where critics point out environmental and labor problems associated with the farmed-salmon value chain. For Gary Leape, vice president of marine conservation for the National Environmental Trust, the reason Wal-Mart can charge only $4.84 for salmon is that they ‘‘don’t internalize all the costs’’ (Fishman, 2006b, p. 4). Pollution costs are externalized into the environment and poor labor conditions are externalized onto the workers. A cleaner environment and reasonable working conditions would increase the price of the salmon. According to Fishman (2006b), the environmental groups and salmon corporations agree that the ‘‘key for managing the impact of salmon farming, to making the business sustainable’’ is neither the salmon companies nor the Chilean government, but the big corporate customers like Wal-Mart and Costco that buy salmon by the ton. The large buyers want to know that the product will be available today and in five years. Economist Rodrigo Pizzaro of the Chilean NGO Fundacion Terram thinks that if U.S. ‘‘consumers understood what’s required to deliver salmon at $4.84 a pound, they won’t think the price is worth the costs’’ (SFM, 2006, p. 2). He urges Wal-Mart to use its economic clout to force the salmon industry to improve its environmental and work policies. Fishman agrees. Although he sees the Wal-Mart Effect as depressing product quality and social–economical–environmental conditions

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around the world through a ‘‘race to the bottom’’ impact as companies and countries cut costs to supply Wal-Mart and similar firms low-cost products, he also sees the possibility that Wal-Mart could use its clout to demand environmental and socioeconomic improvements. In other words, while the critics acknowledge that the Wal-Mart Effect is the main reason that farmedsalmon companies marginalize labor and pollute the environment, they are also hopeful that with enough pressure and support from social movement groups, the power of the global retailers could be used as a mechanism to ameliorate these deleterious aspects of the farmed-salmon global value chain that links Chile to the world.

CONCLUSION The global fish chain could well be analyzed within the parameters of the out-sourcing of production phases to developing countries, which has been a common practice in other activities exploiting the advantages in such countries of cheap labor, abundant and cheap resources and lax regulatory regimes. (Wilkinson, 2006, p. 141)

The events of the case provide several opportunities to analyze capital mobility in the global era. The overall picture reveals a process whereby northern capital (and technology) took advantage of the accelerated reproduction time of farmed-salmon production in Chile as compared to the north and restructured the locus of the global farmed-salmon industry to Chile. Not only was the production time shorter in Chile, as compared to the north, but farmed-salmon supported a continuous production system that supplanted the capture system as the dominant form in the world. Fish could be grown and processed year-round, processing workers employed year-round, and retailers supplied year-round. This rationalized system based on global sourcing generated continuous, rather than seasonal, profits. The farmed Atlantic salmon are the ‘‘pigs of the sea,’’ grown using the same business concepts of poultry and hog production, vertical integration, and CAFOs. In fact, Marine Harvest has significant investments in poultry and hogs under the Nutreco holdings. The trade association SalmonChile provides the coordination function to further rationalize the salmon cluster. Although the farmed-salmon industry began in Scotland and Norway in the 1960s, it colonized new spaces quickly as it diffused into the United States, Canada, Chile, and Australia/New Zealand in search of lucrative production sites and to avoid disease outbreaks associated with the CAFO production structure. In the end, Chile became the preferred site of the

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‘‘race to the bottom’’; it was the lowest-cost-producer. In Chile, TNCs found the optimum production locus for the value chain that linked European (mostly Norwegian) technology and capital, Chilean labor and natural resources, and northern consumers in the United States and Japan. The Chilean state embraced a neoliberal export-oriented industrialization strategy that included a friendly stance toward FDI, a repressive labor regime, and lax environmental regulations. In other words, the Chilean state regulated the process of capital accumulation in a manner that attracted substantial FDI. In response, global capital took advantage of this particular form of social interdependence between capital and workers. As Marine Harvest Chile general manager Johnson commented regarding the merger, Chile is attractive because it not only had a comparative advantage for Atlantic farmed Salmon, but also because the ‘‘very positive attitude toward foreign direct investment generates stability for the industry.’’ Capital mobility in the form of FDI started in 1974 when Union Carbide created Domsea Farms Chile, the first salmon farm. While initiated by a TNC, in the early days of the industry capital mobility and the colonization of Chile as a site of farmed-salmon production was carried out mostly by the sons of Chilean businessmen who researched and built the industry with the help of Fundacion Chile. Fundacion Chile supported the startup of several farmed-salmon companies that were later sold to investors. Indeed, Domsea Farms Chile was bought by Fundacion Chile, renamed Salmones Antarctica S.A., and then bought by Nippon Suisan Kaisha as its source of sushi product for export to Japan, another good example of global sourcing in support of a global value chain. The farmed-salmon industry steadily displaced the more traditional capture-fisheries sector as the major fishing employer in the country. It drew rural people, especially women, into processing jobs and into the social relations of capitalism. Labor occupied a subordinate position in relation to production and financial capital. As one processing plant owner stated, ‘‘labor doesn’t cost a thing in Chile.’’ Informal and repressive labor relations in Chile replaced the more formal relations in the north. When the Chilean industry was faced with depressed prices due to global oversupply, it initiated a flexible piece-rate system that raised production efficiency, but at the cost of increased labor exploitation. Similarly, strikers were fired and union organizers expelled as part of a broader pattern of labor repression. One worker commented that they ‘‘treat us like slaves.’’ The social movement group Ecoceanos noted that the industry-related deaths had occurred ‘‘in the context of permanent anti-union practices and labor law violations.’’ Cardenas of Ecoceanos called on the farmed-salmon TNCs from Norway

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to abandon the double standard and apply the same stricter environmental and labor standards in Chile that they do in their home countries. Following the general pattern of globalization, through the 1980s, 1990s, and 2000s capital mobility accelerated into Chile as the ratio of domestic to foreign ownership reversed. The dominant firms from Europe and Japan expanded their investments in the region culminating in the Marine Harvest merger that solidified the dominance of Norwegian firms in the Chilean farmed-raised salmon industry. The history of the firms involved in the merger highlights not only their steady entry and expansion into Chile, but more importantly their global reach in the feed and farmed-salmon arena. The case documents the growth of the Chilean industry to the detriment of northern European and North American operations, as well as the consolidation of the industry into fewer, larger firms through vertical and horizontal integration. The list of northern corporations and banks that own Marine Harvest testifies to the way financial capital can be mobilized in support of global sourcing. Indeed, the expansion of FDI into Chile over the time period can be read as an example of Friedman’s (1999) ‘‘electronic herd’’ rewarding Chile for embracing globalization. The outcome was that the global expansion of capital had compressed time and space to the point that fresh farmed-salmon fillets from the southern tip of the world could be on consumer’s plates in Miami in 48 hours. While there can be no doubt that the creation and expansion of the Chilean farmed-salmon industry can be read as an exemplary success of globalization, it has not proceeded unimpeded. For example, the recent expansion into the 11th Region is hampered by limited infrastructure. More importantly, and similar to other cases of the globalization of the agrifood system (Bonanno & Constance, 2008), the dual legitimation crises of labor abuse and environmental degradation are attracting unwanted bad press and social movement organization. From Fundacion Terram and Ecoceanos launching the ‘‘Farmed Salmon Exposed’’ campaign at the national level to the global ‘‘Pure Salmon Campaign’’ created by the National Environmental Trust with partners in all the farmed-salmon producing countries, social movement-based resistance is growing in opposition to the labor abuses and environmental externalities of the industry. The industry has a long history of environmental problems regarding pollution and disease outbreaks. Indeed, one of the reasons the industry expanded in Chile was due to the environmental and disease problems in northern waters. These same problems are now manifesting in Chile. The labor abuse issue is more country specific, due to the historical legacy of the repressive labor policies of the Pinochet regime. While it may well be true that if you oppose

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the farmed-salmon industry in Chile you become an ‘‘enemy of the state,’’ it appears that a broad-based social movement is beginning to gain some traction in its appeal for change. The movement might get some help from global retailers like Wal-Mart and Costco. In response to the growing criticisms of labor and environmental problems, the major retailer Wal-Mart joined forces in 2005 with Marine Harvest and SalmonChile to certify Chilean farmed salmon as ‘‘ecofriendly.’’ This project is a more formal manifestation of the voluntary ‘‘clean production agreement’’ program organized in 2003 by Fundacion Chile. While Wal-Mart maintains that this move is an attempt to ‘‘get on the front side environmentally,’’ it is interesting that the industry and the social movements agree that it is only the large retailers such as Wal-Mart and Costco that can bring about major structural changes in the industry that could address the labor and environmental externalities. A recurring theme that emerges in the case is that the consolidation in the farmed-salmon industry is presented by the industry as a necessary condition to gain countervailing power against the growing influence of the global retailers that are driving the value chain. In fact, Puchi of AquaChile noted that what was needed to counter the retailers and provide coordinated positive messages to consumers regarding the advantages of the product was an industry where the top four players controlled 70% of the market. Wilkinson (2006, p. 151) warns us that ‘‘fish farming is dominated by powerful global upstream players and by a complex, still untried technological base with enormous social and environmental externalities.’’ The events of the Chilean case provide further evidence in support of this position. Additionally, the case reveals the increasing influence of downstream players like Wal-Mart and Costco. The Wal-Mart Effect not only drives value chains to source lowest-cost production sites, it also drives production capital to, as opposed to retailer capital, to consolidate to match economic power. The events of the case support other research on the growing power of international retailers like Wal-Mart and Costco (Busch & Bain, 2006; Fold & Pritchard, 2005; Hendrickson, Heffernan, Howard, & Heffernan, 2001). Wilkinson (2006, p. 151) also suggests that the mega-retailers now find themselves in a somewhat precarious position as they are ‘‘locked-in’’ to a new production system that was originally seen as the ‘‘guarantor of idealized consumer demand for quality’’ fish but is now attracting criticism on environmental and social grounds. The CAFO structure and associated environmental impacts is the ‘‘Achilles heel.’’ Wal-Mart’s actions to ‘‘get on the front side’’ with an eco-labeling program can be interpreted as an attempt to stabilize the precarious position. Fishman (2006a, 2006b) is

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hopeful but also skeptical that Wal-Mart will take substantive rather than symbolic actions to rectify the labor and environmental abuses. Gary Leape of the National Environmental Trust does the best job of answering the question, ‘‘How does Chilean farmed Atlantic salmon end up in my Wal-Mart in Texas selling for $4.84 a pound?’’ It is because global capital externalizes the costs onto labor and the environment, mostly in Chile. Chile embraced the neoliberal globalization project and was rewarded with the status of lowest-cost producer of farmed Atlantic salmon in the world. With the acceleration of globalization, the domestic aspects of the industry steadily became integrated into global capital circuits, first production and now increasingly retail. The resulting global value chain consists of Norwegian capital and technology, Chilean production and processing facilities, and powerful retailers in the north selling to U.S. and Japanese consumers. Wal-Mart (and Costco) appear to be driving the chain. The events of the case reveal that the competition between production capital and retail capital to drive the ‘‘race to the bottom’’ global value chains generates concentrated economic power and social movement resistance. As environmental degradation and bad press becomes a public relations liability, the industry will move on to its next pristine location, following the practice of global sourcing. This is the pattern in the poultry and hog industries in the north (Bonanno & Constance, 2008). The competition between capitals accelerates the rate of colonization of new spaces and expansion of the capitalist relations of production. Agrifood researchers need to remain vigilant in documenting this process to contribute to a better understanding of the globalization of economy and society in general, and the globalization of the agrifood system in particular.

NOTE 1. The methodology is informed by commodity systems analysis (Friedland, 1984), commodity chain approaches (Gereffi & Korzeniewisz, 1994; Hopkins & Wallerstein, 1986), and global value chain analysis (Gereffi, Humphrey, & Sturgeon, 2005).

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Bailey, C., Sinclair, P., & Jentoft, S. (Eds). (1996). Aquaculture development: Social dimensions of an emerging industry. Boulder, CO: Westview Press. Barrionuevo, A. (2008). Virus decimates Chilean salmon. Houston Chronicle, March 17, p. A14. Bjorndal, T., & Aarland, K. (1999). Salmon aquaculture in Chile. Aquaculture Economic and Management, 1(3), 38–53. Bonanno, A., & Constance, D. H. (2008). Stories of globalization: Transnational corporations, resistance and the state. University Park, PA: The Pennsylvania State University Press. Busch, L., & Bain, C. (2006). New! Improved? The transformation of the global-agrifood system. Rural Sociology, 69(3), 321–346. Campos, C. M. (2006). The salmon farming and processing cluster in southern Chile. In: C. Pietrobelli & R. Rabelliotti (Eds), Upgrading to compete: Global value chains, clusters, and Latin America. Washington, DC: Inter-American Development Bank. Dingle, S. (2005). Tompkins takes a stand against salmon industry in Chile. The Santiago Times, September 2. Retrieved on September 30, 2007. Available at http://www.ns249. pair.com/mil/english/html/environmental/enviro-53.htm Ecoceanos. (2001). Chilean salmon valley attracts transnational investors. Ecoceanos News. Retrieved on June 5, 2007. Available at http://www.ecoceanos.cl/ingles/salmonvalley1.htm Estrada, D. (2006). Chile: Exposing the salmon industry. Inter Press Service News Agency, October 11. Retrieved on September 21, 2007. Available at http://www.ipsnews.net/ print/asp?indews ¼ 35074 Estrada, D. (2007). Environment-Chile: Salmon farming under scrutiny. Inter Press Service News Agency, July 31. Retrieved on September 21, 2007. Available at http://www.ipsnews.net/ print.asp?idnews ¼ 34169 FishFarmer. (2007). Cooke aquaculture set to purchase Chilean salmon company, September 25. Retrieved on September 30, 2007. Available at http://www.fishfarmer-magazine.com/ news/printpage.php.aid/1271 Fishman, C. (2006a). The Walmart effect: How the world’s most powerful company really works – and how it’s transforming the American economy. New York: Penguin Press. Fishman, C. (2006b). The story of Wal-Mart and Chilean salmon. ReclaimDemocracy, January 23. Retrieved on September 21, 2007. Available at http://www.reclaimdemocracy.org/ walmart/2006/fishman_chile_salmon_farm.php Fold, N., & Pritchard, B. (Eds). (2005). Cross continental food chains. New York: Routledge. Franklin, J. (2001). Deep water: Chiles’ US$1 billion farmed salmon industry races toward no. 1 – but at what cost to consumers? – food safety. Freedom Magazines, Inc., December. Retrieved on September 30, 2007. Available at http://www.findarticles.com/p/articles/ mi_mOBEK/is_12_9/ai_80863202/print Franklin, J., & Woods, C. (2002). Chile’s salmon stakes. The Environmentalist Magazine, September–October. Retrieved on September 21, 2007. Available at http://findarticles. com/articles/mi_m1594/is_5_13/ai_99118800 Friedland, W. H. (1984). Commodity systems analysis. In: H. Schwarzweller (Ed.), Research in rural sociology (Vol. 1, pp. 221–235). Greenwich, CT: Jai Press. Friedman, T. L. (1999). The Lexus and the olive tree: Understanding globalization. New York: Anchor Books. Funding Universe. (2004). Nutreco Holding N.V. Retrieved on September 26, 2007. Available at www.fundinguniverse.com/company-histories/Nutreco-Holding-NV-Company-History.html

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NorTrade. (2006). Pan fish acquires marine harvest to form the world’s largest fish farming company, March 6. Retrieved on October 20, 2007. Available at http://www.nortrade. com/index.php?cmd ¼ show_news&id ¼ 3196 Paley, D., & Dubois, F. (2006). Salmon country. Seven Oaks, March 6. Retrieved on June 4, 2007. Available at http://www.sevenoaksmag.com/features/99_feat4.html Pallisgaard, A. (2007). Chile: Potential largest salmon industry in the world. La Tercera, August 17. Retrieved on September 21, 2007. Available at http://www.buyusa.gov/chile/en/ 207.html Pedersen, H. (2006). Sustainable aquaculture – National policies and global perspectives. Speech presented by the Norwegian Minister of Fisheries and Coastal Affairs at the Aqua Vision Conference, September 26. Retrieved on September 26, 2007. Available at http://www.regjeringen/no/dep/fkd/The-Ministry-of-Fisheries-and-CoastalAffairs Phyne, J., & Mansilla, J. (2003). Forging linkages in the commodity chain: The case of the Chilean salmon farming industry 1987–2001. Sociologia Ruralis, 43(2), 108–127. PSC. (Pure Salmon Campaign). (n.d.) Labor practices in the farmed salmon industry. Retrieved on September 30, 2007. Available at http://www.puresalmon.org QFFIN (Quick Frozen Foods International News). (2007). Marine harvest reports strong sales, August 15. Retrieved on October 15, 2007. Available at http://www.qffintl.com/ news.readnews_test.cfm?article ¼ 1694 Redmayne, P. (2000). Farmed salmon: As world harvests approach 1 million tons the industry consolidates to keep up with spiraling demand. Seafood Business Magazine, August. Retrieved on September 21, 2007. Available at http://www.seafoodbusiness.com/ archives/00aug/farmed.html Reuters. (2003). Salmon farms spawn fortunes, and critics, in Chile, October 2. Retrieved on September 21, 2007. Available at http://www.flmnh.ufl.edu/fish/InNews/salmonfortunes2003. html Roach, S. (2006). Salmon industry booms despite concerns. FoodUSA, July 26. Retrieved on September 30, 2007. Available at http://www.foodproductiondaily-usa.com/news/ printNewsBis.asp?id ¼ 69359s Seafood Business Magazine. (2003). Atlantic salmon. Retrieved on September 19, 2007. Available at http://www.seafoodbusiness.com/buyersguide03/issue_atsalmon.htm SeaWeb. (n.d.) Timeline of salmon aquaculture. SeaWeb Aquaculture Resources. Retrieved on June 13, 2007. Available at http://www.seaweb.org/resources/aquaculturecenter Schurman, R. (1996). Chile’s entrepreneurs and the ‘Economic Miracle’: The invisible hand or a hand from the state. Studies in Comparative International Development, 31(2), 83–109. Schurman, R. (2001). Uncertain gains: Labor in Chile’s new export sectors. Latin American Research Review, 36(2), 3–29. Schurman, R. (2003). Fish and flexibility: Working in the new Chile. NACLA Report on the Americas, 37(1), 36–43. SFM (Salmon Farm Monitor). (2005). International News. Retrieved on October 15, 2007. Available at http://www.salmonfarmmonitor.org/intlnewsapril2005.shtml SFM (Salmon Farm Monitor). (2006). International news. February. Retrieved on September 21, 2007. Available at http://www.salmonfarmmonitor.org/intlnewsfebrurary2006.shtml Skladany, M. (2007). Social life in salmon fisheries and aquaculture. In: W. Wright & G. Middendorf (Eds), The fight over food: Producers, consumers, and activists challenge

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the global food system (pp. 175–200). University Park, PA: The Pennsylvania State University Press. Smith, G. (2005). Chile: An innovative incubator. Business Week: Latin America, October 3. Retrieved on September 2, 2007. Available at http://www.businessweek.com/magazine/ content/05_40/b39532000.htm Staniford, D. (2003). Closing the net on sea cage fish farming. Keynote paper at charting the best course: The future of mariculture in Australia’s marine environment conference. Queensland Conservation Council and the Australian Marine Conservation Society, August 27. Queensland, Australia. Staniford, D. (2005). International news. Salmon Farming Monitor, April. Retrieved on October 15, 2007. Available at http://www.salmonfarmingmonitor.org/intlnewsapril2005.shtml Varas, R. I. (2007). Salmon industry in Chile: An innovation example. SalmonChile A.G., August. Retrieved on August 30, 2008. Available at http://www.sintef.no/upload/Fiskeri_ og_havbruk/Havbruksteknologi/Chile-Norway_AquaNor07/Slideshows/SalmonChile_ Rodrigo_Infante.pdf Volpe, J. P., Taylor, E. B., Rimmer, D. W., & Glickman, B. W. (2000). Evidence of natural production of aquaculture-escaped Atlantic salmon in a British Columbia river. Conservation Biology, 14(3), 899–903. Weatherby, C. (2007). Chile’s salmon farms accused of drug and worker abuses. Vital Choices Newsletter, June 11. Retrieved on October 15, 2007. Available at http://newsletter. vitalchoice.com/e_article000836865.cfm Weber, M. (2003). What price farmed fish: A review of the environmental and social costs of farming carnivorous fish. Report prepared for the SeaWeb Aquaculture Clearinghouse, Providence, RI. Retrieved on August 30, 2008. Available at http://www.seaweb.org/ resources/reports.php#crossroads White, K., O’Neill, B., & Tzankova, Z. (2004). At a crossroad: Will aquaculture fullfill the promise of the Blue Revolution. SeaWeb Aquaculture Clearinghouse Report. Retrieved on August 30, 2008. Available at http://www.seaweb.org/resources/documents/reports_ crossroads.pdf Wikipedia. (2007). Marine Harvest. Retrieved on September 21, 2007. Available at http:// en.wikipedia.org/wiki/Marine_Harvest Wilkinson, J. (2006). Fish: A global value chain driven on the rocks. Sociologia Ruralis, 46(2), 139–153. Witte, B. (2007). Ecoceanos: Chile government must investigate latest salmon scare. The Santiago Times, September 28. Retrieved on September 30, 2007. Available at http:// www.tcgnews.com/santiagotimes/index.php?nav ¼ story&story_id ¼ 14783&topic_id ¼ 1 World Bank. (2005). Technology and growth series: Chilean salmon exports. PremNotes. Number 103. October. Retrieved on September 30, 2007. Available at http://www1. worldbank.org/prem/PREMNotes/premnote103.pdf WWF (World Wildlife Fund). (2007a). Salmon farming threatens Chile’s Patagonian Lakes. Science Daily, June 22. Retrieved on September 21, 2007. Available at http://www. sciencedaily.com/releases/2007/06/070621202901.html WWF (World Wildlife Fund). (2007b). WWF report prompts Chilean salmon reforms, June. Retrieved on September 30, 2007. Available at http://www.worldwildlife.org/wildspaces/ val/updates/salmon-farming.cfm

CHAPTER 7 TRADE AND POVERTY: CHANGES IN FARMING AND COMMUNITY IN NAFTA’S FIRST DECADE Pablo Alvarez, Jason Barton, Kathy Baylis and Marybel Soto-Gomez ABSTRACT The effect of trade on poverty is an open question. Although trade may create opportunities in the form of new markets, producers must be able to switch their production and access these markets to reap the benefits from trade. Those producers that cannot change may be stuck trying to sell products in a market with increased competition from imports. In this chapter, we consider which Mexican farmers have been able to adapt to market changes afforded by North American Free Trade Agreement (NAFTA). We find that although some farmers, particularly those with access to outside information through education or technical assistance, have moved out of corn production, a number of both subsistence and market producers have increased the fraction of their land in corn after NAFTA. Further, we find that market producers and subsistence producers respond quite differently than to agricultural and other infrastructural factors.

Globalization and the Time–Space Reorganization: Capital Mobility in Agriculture and Food in the Americas Research in Rural Sociology and Development, Volume 17, 205–236 Copyright r 2011 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1057-1922/doi:10.1108/S1057-1922(2011)0000017010

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INTRODUCTION Mexico’s adoption of the North American Free Trade Agreement (NAFTA) represents an important event in trade liberalization, not only in terms of Mexico, but also in terms of trade liberalization among developed and developing countries generally (Fuentes, 2005). Arguments in favor of trade liberalization contend that even smaller, less developed economies will be able to capitalize on comparative advantages (Bhagwati & Srinivasan, 2002; Firebaugh & Goesling, 2004) such as Mexico’s inexpensive labor and a climate ideally suited for agriculture. Many critics of regional trade agreements are concerned that technology, capital, and income gaps between the countries, and within Mexico, will allow an untrained labor force the mobility to benefit from the expansion of some sectors as others contract (Harrison, 2007; Topalova, 2007). In the case of agriculture, trade has arguably created markets for highvalue export crops such as horticultural products, while generating import competition for Mexico’s staple crop producers. Therefore, Mexican farmers face financial incentives to move away from subsistence agriculture and lowvalue crops such as corn, a staple of both the economy and the culture of the country for generations, toward cash crop agriculture for export (Bonnis & Legg, 1997). Such a move could require substantially more capital and infrastructure than the farmers’ traditional practices, but have the potential to be far more lucrative. In this chapter, we ask which farmers and regions have moved away from corn and staple food production after NAFTA. People on both sides of the trade debate have used Mexican agriculture and corn in particular as an example of the harms and benefits of trade. Before the recent ethanol-induced price increase, corn imports were seen as threatening small Mexican farmers, and driving them from their traditional way of life (Wise & Waters, 2001; Hanson, 2007; Preibisch, Herrejon, & Wiggins, 2002). On the other side, NAFTA has been seen as a boon for Mexican agriculture, providing diverse benefits with access to the U.S. and Canadian market for Mexican horticultural production. We find a much more nuanced story: already by 2000, Mexican corn production had gone up, not down (Fig. 1). Some regions have drastically reduced their corn acreage, whereas some have increased it substantially. Although the results of this study are not conducive to generalizations, we find that those municipalities with greater infrastructure in 1990, such as higher levels of education, access to agricultural insurance and irrigation, and those with larger commercial farms, have been more likely to move away from planting corn, while in many places there has actually been an increase in area

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planted to corn, even before the recent price increases in corn induced by the recent ethanol boom. Corn has been a vital aspect of Mexican culture for centuries, and despite economic incentives, farmers, especially poorer farmers, have been reluctant to move towards the possibility of profit when it means moving away from a food staple. Mexican consumers have been shown to prefer domestically produced corn, even over cheaper, imported varieties, and this local demand extends to the farmers themselves (Preibisch et al., 2002). Smaller farmers may face obstacles when moving from their traditional farming methods, including access to more expensive purchased inputs to produce higher-value crops, implying the need for access to credit (Williams & Shumway, 2000). Furthermore, entrance into the global food system demands that farmers have consistent access to markets, including the demand and ability to transport crops to market. Taken together, these factors illustrate why many farmers are reluctant to switch from growing food they can eat to growing commodities they may or may not be able to sell. These constraints also indicate the need for increased infrastructure, including education to help those farmers who want to make the transition. While policy changes may happen rapidly, social and ecological systems may be slower to adapt (Aggarwal, 2006). Hence, even as we narrow the focus of this chapter to arrive at a more detailed understanding of some of the components at work in determining crop choice after trade, it is essential to remember that the economy is one aspect of a larger system, and that the change in one portion affects the system as a whole. One key assumption needed for a country to gain from trade is that labor and capital can move from producing import competing goods to export products. Limits on mobility constrain economic options, particularly for the poor. Education is clearly a major factor in labor mobility, as are

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innumerable other attributes. Capital mobility may refer to farmers’ access to credit for investment in tractors, improved seed, or other inputs, but can also refer to education and risk when attempting to move from one production regime to another. Clearly, much of this mobility will be dependent on infrastructure and investment, either from government or private industry. When farmers and farm laborers have little education, little money, and little access to credit, mobility is greatly hindered, meaning the transition from subsistence agriculture to cash crop production for export, or from corn to tomatoes, will be much more difficult than if resources are available to aid in this transition. Such realities benefit those farmers and other individuals already endowed with the means for success, and greatly disadvantage those without such resources. The question of mobility reaches to the core of Neoliberal reform. Robinson (2004) argues that a group of elites drives policy changes that focus on potential economic gain with little regard for people who are contentedly engaged in autarky, uninvolved and uninterested in the workings of international economics. He labels this group the transnational capitalist class (TNCC) and points out that they are unbound by geography or industry and exert considerable pressure on the practices of producers and consumers worldwide. These are the groups, he claims, that benefit most from trade due to their highly mobile capital and who also have the greatest ability to influence policy in ways that will further benefit them. Another fierce critique of Neoliberal reform comes from David Harvey (2005), who claims that, regardless of its principals, in practice Neoliberalism serves a small group of elites at the expense of the majority. He posits that the freedom of this elite class to maximize their own potential severely inhibits the freedom of many to practice the lifestyles they choose. Policy changes that accompany reforms such as NAFTA include those beyond trade, such as deregulation of lending policies, privatization of extensions services, and others, can facilitate the mobility of capital for investors and agribusiness, but may restrict the mobility of those who lack capital, information, or access to new markets. Even if they have the means to move to a new form of production, which may mean a new lifestyle, Harvey questions the right of elites, politicians, or anyone to force people to move into a market economy they may not wish to join. In our data, we cannot tell if the people who continued to produce corn and other staples did so for cultural reasons or wanted to change but lacked the means. We can only examine whether or not those who continued to produce staple crops had characteristics more or less associated with those who switched to export production.

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Who gains from the benefits offered by trade liberalization? We consider farm conditions such as access to credit and inputs, as well as aspects of education, and other household characteristics, and ask whether these factors affected farmers’ ability to switch out of corn production. Only when we have this more holistic understanding of the entire system can we ask the central question of this chapter: Have Mexican farmers, especially those in municipalities that lack solid infrastructure, entered the global food system by moving away from the common staple and subsistence crop, corn, since the implementation of NAFTA? This chapter provides much needed empirical evidence regarding the effects of trade liberalization on marginalized farmers. The combination of agricultural data including inputs used and access to credit and other resources, along with census data describing levels of education, the physical characteristics of households, allows us to control for differences in farmers’ characteristics, providing a more detailed picture of the situation in Mexican agriculture. Rather than national or even state-level data, figures are from municipalities in 20 of the 32 states, allowing for a national picture based on localized conditions. The limitations of this chapter include the fact that municipal averages shield some of the disparities within municipalities, and also that using data from only two years (1991 and 2001) does not allow for variations in markets or growing conditions before and after NAFTA. However, we are able to consider not only the average effect of factors influencing capital and labor mobility on crop choice, but how a suite of factors have diverse results in different regions and for different types of farms. Taking into account the full distribution of the data, we are able to contribute a more complete picture of the changes in Mexican agriculture since the inception of NAFTA’s comprehensive policy changes. The chapter proceeds with background regarding trade liberalization and Mexican agriculture before and since NAFTA as well as a literature review. Methods are then discussed, followed by a description of the data and some summary statistics that help us to understand the pre-NAFTA social and agricultural conditions in Mexico relevant to this study. Regression results are then presented, followed by a brief conclusion.

BACKGROUND AND LITERATURE REVIEW Initial research regarding free trade and poverty focused on developed economies as people in countries such as the United States grew worried

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that there would be flight of jobs to where labor is least expensive (Harrison, 2007). As a corollary, trade skeptics have since turned to the developing world, fearing that attracting jobs because of cheap labor would entrench the poor in a system that can only thrive if those in poverty offer their services for the lowest possible price (Gallagher, 2004). Bhagwati and Srinivasan (2002) contend that trade liberalization will create larger economies, and with a larger pie, everyone can receive a larger piece. Their theory takes two forms: First, in static terms, labor-intensive industries earn an immediate comparative advantage with their cheap labor, while the macroeconomic stability they posit as endogenous to free trade will limit inflation and encourage investment in infrastructure that will allow the poor to flourish. Second, the economy will grow over time as the countries further exploit their comparative advantage. Integration with the global economy will also provide exposure and access to new technologies and different production systems, which will result in greater efficiency. Still, the exact nature of the relationship between trade and poverty remains in question. Trade liberalization is almost never a single or even a single set of policy changes, but is instead a raft of policy changes regarding wage rates, tariffs and taxes, privatization, and related but separate changes in technology and other factors of production. Thus, Rodrik & Rodrı´ guez (2000) contend that it is difficult if not impossible to show conclusively that economic growth and reduction in poverty are directly caused by trade liberalization. This ambiguity has not diminished in the eight years since their article was published as various methods of examining the same economies produce different results. Harrison (2007, p. 9) shows that empirical studies that measure trade as exports and Foreign Direct Investment (FDI) generally show positive results in terms of poverty reduction, while measuring trade as ‘‘removal of protection (an ex ante measure of globalization) or import shares (an ex post measure) are frequently associated with rising poverty.’’ In another country-specific study that addresses initial disparities within an economy and the effects of trade liberalization, Topalova (2007, p. 26) arrives at more conclusive results in Indian districts: ‘‘As those employed in traded industries were not at the top of the income distribution on the eve of the trade reform, the relative fall in wages contributed to the slower poverty reduction [y], which retarded the pull out of poverty of the poorest subsistence farmers’’. On the other hand, she notes that complimentary policies such as labor market reform that increases labor mobility ‘‘can ease the shock of liberalization and minimize its unequalizing effects’’ (sic) (p. 27). Topalova’s and Harrison’s (2007) articles list some of the

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most beneficial accompanying policies as those that provide extension services, infrastructure, irrigation, access to credit and finance, and education and health services. They point out that these are the policies leading to forms of labor mobility most beneficial to laborers and the economy. Focusing on Mexico, Gordon Hanson (2007) measures income distribution across states with varying levels of exposure to globalization. In general terms, he finds that the northern states closest to the United States benefited more from trade as factories and farms sit closest to their products’ markets. However, the exact nature of the causality is in question because of various confounding variables at work. Greater economic activity in some places in the North has also resulted in stronger infrastructure than in the poorer and more remote southern parts of Mexico, which may have allowed northern states to benefit from trade. As an example, the difference in various characteristics such as housing, education, and agricultural data for 1990 are presented in Table 1 for Chiapas and Tamaulipas and for subsistence versus cash crop producers. Wise and Waters (2001, p. 4) describe struggles and successes of poor communities to adapt to the increasingly integrated Mexican economy and to capitalize on and maintain local control over natural and cultural resources. Their article identifies three areas that should be prioritized in research on NAFTA and the effects of Neoliberal reform on poor communities: labor, environment, and small-scale agriculture. By locating communities that are increasing economic prosperity using culturally and ecologically sustainable practices within NAFTA’s guidelines, they elucidate how ‘‘the dynamic of international economic integration can be managed in a way that does not marginalize large populations and damage important ecosystems.’’ The mandate to examine small-scale agriculture further justifies the research presented here as we are able to look at production choices of farmers in those municipalities with weaker infrastructure and those engaged in subsistence farming. Perhaps the most helpful research in relation to our subject area is that of Rivas’ ‘‘The effects of trade openness on regional inequality in Mexico’’ (2007). Focusing on a few important aspects of infrastructure (roads, plumbing, education) as well as incomes, and regressing these against measures of trade openness, she finds that increased openness to trade helps those regions with existing infrastructure and already higher than average wages. This finding reaffirms the contention that government support should be aimed at providing infrastructure so that all can work to benefit from trade.

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Table 1.

Summary Statistics.

National Tamaluipas Chiapas Subsistence Market Housing W/ electricity W/o electricity Indoor plumbing Outdoor plumbing No plumbing Marginal roofa

0.744 0.256 0.422 0.497 0.081 0.261

0.687 0.313 0.279 0.636 0.085 0.332

0.577 0.423 0.291 0.573 0.136 0.240

0.692 0.308 0.375 0.516 0.109 0.273

0.777 0.223 0.452 0.485 0.063 0.254

Education Literate Illiterate Elementary education High school education Wages Less than minimum wage More than 2  minimum Wage

0.447 0.126 0.234 0.534

0.528 0.074 0.195 0.573

0.346 0.190 0.247 0.476

0.415 0.146 0.243 0.518

0.468 0.113 0.227 0.545

0.114 0.049

0.118 0.048

0.177 0.027

0.125 0.039

0.108 0.055

Language and migration No Spanish Spanish and indigenous Spanish only Migratedb

0.030 0.116 0.831 0.025

0.000 0.002 0.996 0.028

0.097 0.208 0.664 0.011

0.046 0.168 0.761 0.021

0.020 0.083 0.875 0.027

Farm characteristics No credit Credit Insurance No insurance Technical assistance Pesticide

0.811 0.189 0.039 0.961 0.080 0.443

0.801 0.199 0.084 0.916 0.167 0.339

0.700 0.300 0.027 0.973 0.066 0.487

0.880 0.120 0.014 0.986 0.038 0.309

0.767 0.233 0.055 0.945 0.108 0.528

Corn and agricultural Production Proportion of land in corn (1991) 0.41 0.15 0.31 Proportion of land in corn (2000) 0.30 0.08 0.63 HA planted to corn (1991) 6482472.4 363305.4 750021.1 HA planted to corn (2000) 5202714.9 125238.3 902745.9 Total agricultural land (HA) 25042704.8 2350863.0 2439776.0 Notes: Proportion of the population responding to the following variables in 1990/1991c. Data are national averaged, Tamaulipas average, Chiapas average, and averages for subsistence and finally market producers. a A marginal roof is defined as one made of wood, palm leaves, or cardboard. b Migration is defined as those individuals residing in a municipality other than that of their birth. c All data come from the 1990 Census of population and Housing except for information on farm characteristics, which comes from the 1991 Agricultural Census. d National figures do not include all municipalities.

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Mexico’s Move to Privatization The roots of Mexico dropping its barriers to trade stretch back to the early 1980s with an early balance of payments crisis (Hanson, 2007). Subsequently, it joined the General Agreement on Tariffs and Trade (GATT) in 1986 and deregulated its rules regarding foreign investment while easing government support of industry. Under President Carlos Salinas (1990–1994), the Mexican government began negotiations with the United States and Canada regarding a more formalized and pervasive system of trade liberalization in North America (Brayman, 2004). NAFTA initiated a new level of trade liberalization as it marked the decline and dismantling of several government agencies. For farmers, especially poorer farmers, the government’s elimination of price supports and credit provided by The National Company of Popular Subsistence (CONASUPO) in the mid-1990s was a particularly important event. Just as farmers were being encouraged to move toward cash crop agriculture that required greater capital and more intensive inputs, much of their support was substantially decreased, if not completely eliminated. ASERCA (Support Services for Agricultural Marketing) was created in the wake of CONASUPO’s dismantling, offering programs such as PROCAMPO as a means to aid in the transition (Taylor, Yunez-Naude, Paredes, & Dyer, 2005). The PROCAMPO program, which provided decoupled income transfers, has been intended to ameliorate poverty by giving producers a cash payment without tying them into specific production decisions and is instead based solely on area planted (Sadoulet, de Janvry, & Davis, 2001). The program also allows farmers to purchase inputs locally, thus strengthening local economies, as opposed to other programs such as Alianza in which the government purchases and distributes inputs (Cord & Wodon, 2001; Sadoulet et al., 2001). Meant to help smaller farmers in particular, PROCAMPO is limited to the first ‘‘100 ha that any farmer can claim’’ (Baffes & Meerman, 1998, p. 197). According to the same article, however, ensuring that these benefits are not disproportionately distributed to larger land-holders is difficult, with costs of enforcement possibly becoming prohibitive or outweighing the benefits. Still others (Wodon & Yitzhaki, 2002) have also pointed out the tendency of PROCAMPO to benefit large producers rather than those small farmers more in dire need of support. Regardless of whom it actually helps, it is scheduled to be eliminated by 2008 (Lederman & Serven, 2005).

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In 2003, however, the Mexican government re-introduced subsidies tied to production. The subsidies fall under the Target Income Subprogram, which guarantees participating producers of specific field crops (corn, wheat, sorghum, cotton, rice, soyabeans, and other oilseeds) that their income from these crops will not fall below a set level (USDA-ERS, 2007). Another major policy change came in 1992 with PROCEDE, the controversial privatization of the ejido system of communally owned land. Because these lands were held in perpetuity by an entire community, their titles could not be used as collateral, thus greatly limiting or even eliminating the possibility of private credit. Thus the ejido system was amended, at least in part, to enhance small farmers’ access to credit. Communities could elect to split their lands among members, and individual members or even communities as a whole could now use the titles as collateral, or could sell the lands outright (de Janvry, Gordillo, & Sadoulet, 1997). According to Taylor et al. (2005, p. 104), ‘‘the amount of credit channeled to agriculture grew during the first four years of the 1990s (11% in constant pesos), but it has decreased sharply since the financial crisis of 1995.’’ Although the peso crisis, which came just months after the formal adoption of the Agreement, was not a result of NAFTA, it combined with the dismantling of CONASUPO to severely limit the credit available to poor and was apparently not sufficiently supplanted by the change in ejido land tenure rules. Because of its importance to Mexican culture and the economy, corn was initially protected from import competition, even during the opening stages of trade liberalization throughout the 1980s and into the 1990s. But as many corn producers are often net consumers of corn and because U.S. producers, aided by production subsidies, have ‘‘a significant advantage over Mexico in production per hectare (3.5:1),’’ protective measures intended to be phased out over the first 15 years of NAFTA were eliminated in just over two years (Wise & Waters, 2001, pp. 10–11). The PROCAMPO program, which instituted the decoupled income payments to farmers discussed earlier, was introduced in part as compensation for the loss of price protection. Along with other reductions in the state’s intervention with agriculture that surrounded NAFTA, the government also virtually eliminated its extension services, cutting government extension services staff from around 20,000 employees in the 1980s, to just 370 in 1995 (Lo´pez, Nash, & Stanton, 1996). Since then, extension services have been provided almost exclusively by private firms such as input manufacturers or non-governmental organizations. This change leaves the majority of small farmers with little technical advice while trying to make the difficult transition from

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subsistence agriculture to cash crop production for export. In light of our earlier discussion of capital and labor mobility, it is clear that poorer farmers, or farmers in more marginalized parts of the country, will have greater difficulty accessing the means necessary to benefit from trade liberalization.

METHODS We use municipal-level data for 1991 and 200 investigate the change in area planted to corn as a function of geographical region, municipality level statistics such as education and household characteristics, and farm statistics such as use of irrigation and access to credit and to market. The model compares the change in planted area dedicated to corn between municipalities with greater infrastructure in 1991, to those with weaker facilities. We begin by considering factors that influence the ratio of hectares planted in corn to total potential cropped land in 1991, and then consider the same ratio for 2000.1 These two years allow for examination of a baseline year well before the adoption of NAFTA, and a year sufficiently long afterwards to avoid complications with the transition as well as with the financial crisis of 1995. Independent variables for all regressions come from agricultural and general census figures from 1990, allowing us to establish a baseline of infrastructural conditions well before NAFTA’s inception. We choose to focus on corn in isolation as the dependent variable because of its historical and cultural significance to Mexico. However, we also consider the percentage of land in all staple crops (corn, beans, wheat, barley) for those same two years. The data come from the 1990 Mexican Census on Population and Housing, and the yearly Agricultural Census in 1991 and 2001. Next, we look at the determinants of the change in corn and staple crops planted between the two years, 1990 and 2000. This difference is then regressed against independent variables quantifying levels of marginality in five areas: farm resources, language and migration, the physical characteristics of people’s homes, and education. The data include municipality level statistics from municipalities in 20 of the 32 states. In the other 12 states various other issues within the data, such as a change in census methods from 1990 to 2000, complicated the comparisons and thus led those states to be dropped from the study. The 20 states that remain represent the key social and geographical regions of Mexico, including border states, Central Mexico, the mountainous South, the Pacific coastal region, and all of the

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Yucatan peninsula. The data clearly represent an accurate cross section of Mexico, its agricultural sector, and the independent variables that determine the study’s results. The data are described in more detail in the following section.

DATA AND SUMMARY STATISTICS Those who have examined Mexico’s economic situation both before and after NAFTA are often struck by the disparities among its population. Traditionally, these disparities have fallen along general geographic lines, with greater development and wealth gathering in the north, closer to the border with the United States’ vast market (Lederman & Serven, 2005). This reality forms part of the origin for beliefs that northern states would be in a better position, both geographically and structurally, to gain from further trade liberalization (Gallagher, 2004). What we see from change in cropping patterns since NAFTA is much less clear-cut. Although states in the north (especially the northeast) decreased the number of acres planted to corn, and the south increased their corn acres, this pattern is not universal. Some municipalities in both the south and north dramatically increase their corn production (for example in Sinaloa and in Chiapas), while others in the two region cut it substantially (Chihuahua and Morelos). Thus, a simple NorthSouth argument is not sufficient. With that in mind, here we present a brief review of some of the 1990 figures relevant to this discussion and to the regression results that follow. These basic statistics are meant to paint a picture of the communities studied here and are not to be confused with the regression results, which are presented in the next subsection. In this portion we examine national averages, then compare municipalities that are mostly composed of subsistence farms to those that grew more crops for sale. As opposed to presenting only national averages, to illustrate the differences across Mexico, we compare these data to two states, Chiapas and Tamaulipas, that have marked differences in each of the explanatory variables in both farm and non-farm characteristics. Chiapas is well known for its cultural, historical, and ecological splendor, as well as its poverty and social unrest. The Zapatista movement has been a consistent thorn in the side of those who might exploit Chiapas’ resources for the benefit of those beyond its borders. We contrast details of Chiapas with those from Tamaulipas, a state on the other end of the country, along the Eastern edge of the border with the United States. While this approach

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may seem to support the assumption that there is a marked North/South divide in Mexico, more careful examination of the data does not support this generalization. These two states are chosen merely because they illustrate that there is indeed a substantial gap between various portions of the population, and exploring this gap and the impacts it has on future economic growth is the larger objective of this chapter. The details from the 1990 Mexican Census of the Population and the 1991 Census of Agriculture and Livestock provided in this section fall into five general categories. The first, farm characteristics, includes insurance, access to credit and technical assistance, use of tractors and inputs, and whether crops are used for subsistence or sold to market. The second category summarizes levels of employment and wages across all sectors. The third section provides relevant cultural details such as languages spoken, indigenous, Spanish, or both; and the amount of migration within Mexico. Next, statistics are given that describe the physical characteristics of the people’s houses such as plumbing, type of roof, and access to electricity. Finally, statistics on levels of education are provided.

Farm Characteristics Farms in Mexico, as in many parts of the world, range from the very smallest subsistence, family farm, to large, highly mechanized, commercial estates with enormous access to capital and credit. About half (44%) of these municipalities report a majority of subsistence operations, with 16.8% of farms producing for subsistence in Tamaulipas, and 37.1% in Chiapas. Even before the dismantling of public extension services, only 8% of farmers nationally responded that they have access to technical assistance, with 16.7% in Tamaulipas, and only 6.6% in Chiapas claiming to have access to this important resource when making the transition to a new form of agriculture. When we only consider those municipalities where the majority of farms are subsistence operations, 3.8% report access to technical assistance, with almost three times more, 10.8%, in municipalities with less than half subsistence agriculture. In terms of farm inputs, 33.9% of farmers in Tamaulipas report using chemical pesticides, with 44.2%, reported nationally. Among many paradoxical facts in Mexican agriculture, 48.7% of the comparatively poorer farmers in Chiapas also report using pesticides. When we distinguish between subsistence and non-subsistence farms, we find yet another interesting twist, though this time it is more predictable: 31% of

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subsistence farms report using pesticides, as opposed to 53% for the cash crop producers.

Employment and Wages As the Mexican Census of the Population provides figures for many levels of employment, we have grouped these levels into three categories: those earning less than minimum wage are in the lowest stratum, with people earning minimum wage to two times minimum wage in the next stratum, and the remainder of wage earners in the highest stratum. Low-wage earners are, as expected, more common in Chiapas, with 17.7%, and only 11.8% in Tamaulipas, compared to the national average of 11.4%. On the other end of the economic spectrum, 2.7% of working age people in Chiapas are listed as having high employment, defined as earning at least two times the minimum wage, with 4.8% in Tamaulipas, and a national average of 4.9%. These statistics provide a glimpse into the economic realities of the Mexican people, adding another aspect to the picture of Mexican culture. Interestingly, as reported in Table 1, there is less income disparity between subsistence and non-subsistence producers.

Language and Migration Studies of Mexico’s integration into the global economy are often focused on the distinctions between modern Mexico and more traditional, indigenous cultures still thriving there. Preibisch et al. (2002) provide a case study examining this move as it relates to food security and gender, studying an indigenous community in Mexico State and their reluctance to move away from growing corn for consumption. While language is not the only barrier faced by the people in this community, it is certainly an important element, and so is included in our research here. As of 1990, 3% of the population of Mexico spoke no Spanish, while 11.6% spoke both Spanish and at least one indigenous language. In Chiapas, 9.7% spoke no Spanish, but fewer than 0.001% spoke no Spanish in Tamaulipas. This may put Chiapas at a bit more of a disadvantage on the global economic stage, but the fact that 20.8% speak both Spanish and at least one indigenous language, compared to 0.2% in Tamaulipas, may actually help them provide a bridge between these cultures. The two types of farms are only slightly less distinct, with 4.6% of the people speaking no Spanish in subsistence

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communities, compared to 2% in the other communities. Speakers of both languages are twice as prevalent among municipalities with more subsistence farming, at 16.9%. Again the data from the two states fall on either side of the national average when it comes to percentage of people in each state who now live in a municipality different from their birth. The national average is 2.5%, with averages of 2.8% and 1.1% in Tamaulipas and Chiapas respectively.

Housing and Physical Characteristics While the structure of private housing may not play a direct role in the functioning of agriculture, it is an important indicator of the infrastructure within which the Mexican people live. Differences such as access to water and even the materials used in roofing provide clear illustrations of the varying levels of wealth and poverty within the Mexican population. We are specifically interested in how the poor have been affected by NAFTA, and whether they have been harmed or have benefited from changing crop markets. A large percent of the population in Mexico lived in poverty in 1990. Over one quarter (26%) of households in our sample had roofs made of wood, palm leaves, or cardboard, and about the same proportion, 25.6%, were without electricity at home in 1990. The picture painted here is starkly different than the one imagined by those who have seen the low-rise apartment buildings and steel and glass offices of Mexico City. Furthermore, 49.7% of households in Mexico had only outdoor plumbing. Another 8% of households nationally had no plumbing at all, but accessed water in town. The importance of these facts is not limited to housing, but must also be impacted by the last set of summary statistics, which describe levels of education. The exact relationship between these rural poor and subsistence producers is unclear. Not all those living in rural poverty are subsistence producers. For example, the correlation between the percent living without electricity and the percent of subsistence farmers is only 0.26, and having no electricity is negatively correlated with planting a large percentage of the land to staple crops (0.05). This result may be because those living in the poorest conditions do not make the cropping decisions for the farm land in their area. For example, these rural poor may be working for other landowners. Because we cannot determine land ownership or control in this chapter, we consider only the lack of plumbing in our crop regressions, since

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it occurs in more remote areas with higher subsistence production. Discovering the effect of trade on farm laborers is left for future work.

Education and Literacy Education is a key indicator of well-being in a society, as this will be a determinant for all other characteristics in the future. Those areas with a higher literacy rate are more able to adapt to change, and those with higher education are likely more adept at finding and adopting new technology. In 1990, 53.4% of the population nationwide had at least a high school education, with a rate of 47.6% in Chiapas and 57.2% in Tamaulipas. The national literacy rate was 44.7%, and 34.6% and 52.8% in Chiapas and Tamaulipas respectively. Once again we see the disparities within Mexico regarding infrastructure, and it is with these numerical illustrations that we move further into the investigation of how well the diverse segments of the population are making the transition from largely local economies into the global food system and the global economy.

REGRESSION RESULTS AND DISCUSSION One basic regression was run, first on the entire data set of approximately 1,200 observations, then with data broken down to aid in the comparisons between municipalities that had or had not already engaged in cash crop agriculture before the advent of NAFTA. We begin by seeing what factors affected the fraction of land that was planted to corn in 1990 and 2000. We use the log of the ratio of corn to crop land as our dependent variable as this distribution is close to normal. The full results can be found in Table 2. Given that municipalities range widely in size, we weight the observations by the crop land base in 1991.2 We find that municipalities with more households without plumbing plant a higher ratio of corn to other crops, although at a decreasing rate. At the average level of no plumbing, that implies that a 1% increase in the number of households without plumbing translates into a 1.4% increase in the ratio of corn to total crops in 1991. The marginal effect decreases in 2000 so that a 1% increase in households without plumbing translates to a 0.7% increase in percentage of land in corn. Those municipalities with a higher proportion of the population who do not speak Spanish or have a lower level of education also tend to plant a

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Table 2.

Land Planted to Corn.

Log of Land in Corn to Total Cropped Area

1991

2000

Coefficient Standard Coefficient Standard error error Marginality characteristics % households with no plumbing % households with no plumbing squared Illiteracy rate % of people with high school education or more % of people who do not speak Spanish % of habitants who migrated to the municipality Farm characteristics Farmsize (hectares) Farmsize squared % of land that has no irrigation % of farms without access to credit % of farms without insurance % of farms without a tractor % of farms using improved (purchased) seed % of farms using organic fertilizer % of farms using chemical fertilizer % of farms using pesticides % of farms with technical assistance Access to market Population density (people per farmed hectare) Vehicles per farm % of farms producing primarily for their own consumption Region North West North Central Chiapas Pacific Yucatan Tamaulipas and Veracruz Constant Number of observations R2

1.430 1.948 0.371 0.899

0.695 0.960 1.002 0.802

1.414 2.428 0.458 2.586

0.858 1.202 1.223 0.953

1.425 0.784

0.533 2.228

1.173 2.393

0.595 3.210

0.000 0.000 0.507 0.608 1.562 0.551 0.303 0.359 0.984 0.299 0.473

0.001 0.000 0.149 0.242 0.634 0.152 0.223 0.222 0.173 0.167 0.498

0.013 0.000 0.274 0.531 1.465 0.339 0.544 0.401 0.868 0.478 1.254

0.003 0.000 0.228 0.302 0.978 0.207 0.307 0.280 0.209 0.239 0.724

0.002 0.514 1.523

0.001 0.172 0.178

0.000 0.156 2.073

0.001 0.232 0.243

1.209 0.046 0.288 0.166 0.667 0.155 2.090 1164 51

0.475 0.101 0.132 0.079 0.154 0.087 0.813

1.327 0.230 0.009 0.036 0.295 0.159 1.939 1048 57

0.489 0.140 0.148 0.116 0.193 0.104 1.195

Notes: Results for log of land planted in corn compared to all crops on marginality and farm characteristics, 1991 and 2000. Coefficients in bold imply significantly different from zero at the 5% level. Coefficients in italics imply significantly different from zero at the 10% level.

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larger portion of their land to corn. So in general, the more marginal areas, in terms of housing infrastructure, education, and language, the higher the portion of land planted to corn. Further, there is some evidence that, at least in 2000, having access to outside information through channels such as technical assistance decreased the amount of land in corn. Farm characteristics had different effects on the amount of corn grown. Farm size was only found to matter in 2000, when larger farms were more likely to plant a smaller percent of their land to corn, but this effect diminishes as farms increase in size. Perhaps somewhat surprisingly, having access to credit and access to irrigation increase the percent of land planted in corn. Having access to insurance, however, decreased the percent of land in corn. This latter result makes sense in that it is likely higher value crops require crop insurance. Not having a tractor decreased the amount of corn, which may make sense in that corn is more easily planted and harvested by machine, while some horticultural crops may be more easily planted and harvested by hand, thus the argument that Mexico capitalize on its comparative advantage by pursuing higher value, more labor-intensive horticultural crops. Counter to the argument that corn production uses lower chemical and mechanical inputs than the alternatives, we find that a higher amount of chemical fertilizer and pesticide is associated with a higher proportion of land in corn over both years. Having a larger local market increased the amount of corn produced, while having access to a vehicle that can be used to transport goods to market decreased the amount of corn. This highlights the mobility factor’s importance and the farmers’ basic needs to move their crops to market if they seek to move away from subsistence production. Those farms that produced more for their own consumption in 1990 tended to grow more corn in both 1991 and in 2000. Notably, producing for subsistence had a larger effect on those growing corn after NAFTA. Regionally, farmers in Chiapas and farmers in Tamaulipas had a smaller portion of their land in corn in 1991 relative to those states in the center of Mexico (surrounding Mexico City), but while farmers in Tamaulipas continued to be below the central highlands in 2000, Chiapas farmers now had slightly higher portion of their land in corn than the central states. We ran these same regressions for all staple crops, and the results are essentially the same, and are presented in the Appendix. Next, we consider the effect of these same marginality variables and farm characteristics on the change in corn grown. We consider the difference between the percent of land in corn in 2000 compared to 1991. The results can be seen in Table 3.

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Table 3.

Land Planted to Corn. Coefficient

Robust Standard error

Marginality characteristics % households with no plumbing % households with no plumbing squared Illiteracy rate % of people with high school education or more % of people who do not speak Spanish % of habitants who migrated to the municipality

0.114 0.578 0.707 1.856 0.127 3.784

0.604 0.769 0.696 0.624 0.369 2.092

Farm characteristics Farmsize (hectares) Farmsize squared % of land that has no irrigation % of farms without access to credit % of farms without insurance % of farms without a tractor % of farms using improved (purchased) seed % of farms using organic fertilizer % of farms using chemical fertilizer % of farms using pesticides % of farms with technical assistance

0.004 0.000 0.030 0.079 0.765 0.163 0.598 0.380 0.042 0.081 0.736

0.002 0.000 0.138 0.248 0.594 0.173 0.225 0.194 0.132 0.155 0.534

Access to market Population density (people per farmed hectare) Vehicles per farm % of farms producing primarily for their own consumption

0.001 0.015 0.276

0.001 0.154 0.174

0.564 0.070 0.250 0.119 0.309 0.041 0.276 1048 22

0.337 0.094 0.118 0.092 0.123 0.083 0.750

Region North West North Central Chiapas Pacific Yucatan Tamaulipas and Veracruz Constant Number of observations R2

Notes: Difference between log percent of land planted to corn in 1991 and 2000. Coefficients in bold imply significantly different from zero at the 5% level. Coefficients in italics imply significantly different from zero at the 10% level.

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As one might predict, this regression had far less explanatory power than the two previous ones. Only a handful of variables significantly explained the change in cropping patterns from 1991 to 2000. Of these, a few are particularly telling. Those municipalities with more educated populations switched out of corn production. Similarly, those areas with more people from outside the community moved out of corn, which could be an indication of the importance of labor mobility in switching to new production regimes. Last, those with more access to technical assistance also had a smaller percent of their land in corn after NAFTA as compared to before. These results might indicate that those regions with less access to outside information – from education, personal contact, or technical assistance – were less able to switch into other crops. Smaller farms were also likely to keep producing corn. However, somewhat counter intuitively, we also see farms with better access to credit, farms using improved seed, and those using more fertilizer not changing or, in fact, producing more corn. Here we come to the apparent contradiction, that it is both small farms without access to information that continue to produce corn, as well as farms with good access to credit and the ability to purchase inputs. We will return to this question shortly. Regionally, farms in Chiapas were more likely to remain in and increase their corn production than those in the region around Mexico City, while those along the Gulf Coast, including Tamaulipas, were more likely to switch to other crops after NAFTA. Next, we split our data into those municipalities with a majority of farmers producing for their own production and those where the majority of farmers produce for the market. We then regress the change in percent of corn acres on the same variables for these two groups. Results are presented in Table 4. What is of particular interest in these results is the comparison between the two groups. The first result to note is that, predictably, the regression on the market-based producers did a much better job of explaining their change in crop choice than it did for subsistence producers. We will focus primarily on those coefficients which are significantly different from zero for at least one group, and the opposite sign for the other. For example, having a higher level of education meant that producers reduced their corn production if they produced for the market, while higher education did not affect, or slightly increased, the land planted to corn by subsistence producers. Having a larger farm meant that those market producers switched a larger portion of land out of corn, while for subsistence producers, having larger farms meant either switching less land out of corn, or producing more corn.

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Table 4. Subsistence versus Cash Crop Producers. Subsistence Producers

Market Producers

Coefficient Standard Coefficient Standard error error Marginality characteristics % households with no plumbing % households with no plumbing squared Illiteracy rate % of people with high school education or more % of people who do not speak Spanish % of habitants who migrated to the municipality Farm characteristics Farmsize Farmsize squared % of land that has no irrigation % of farms without access to credit % of farms without insurance % of farms without a tractor % of farms using improved (purchased) seed % of farms using organic fertilizer % of farms using chemical fertilizer % of farms using pesticides % of farms with technical assistance Access to market Population density (people per farmed hectare) Vehicles per farm % of farms producing primarily for their own consumption Region North West North Central Chiapas Pacific Yucatan Tamaulipas and Veracruz Constant Number of observations R2

0.702 1.020 0.514 1.020

0.619 0.722 0.947 0.900

0.030 0.722 0.153 1.965

1.019 1.424 1.133 0.804

0.493 7.088

0.470 5.338

0.368 3.734

0.557 2.163

0.007 0.000 0.013 0.196 2.089 0.172 0.282 0.103 0.442 0.031 1.210

0.002 0.000 0.192 0.228 1.901 0.203 0.272 0.238 0.158 0.189 0.967

0.007 0.000 0.124 0.114 0.904 0.119 0.941 0.472 0.018 0.199 0.399

0.003 0.000 0.167 0.400 0.630 0.228 0.280 0.258 0.220 0.228 0.599

0.000 0.290 0.132

0.000 0.239 0.354

0.009 0.142 0.785

0.005 0.177 0.349

0.572 0.103 0.314 0.173 0.426 0.011 0.658 612 29

0.361 0.123 0.153 0.107 0.148 0.103 0.804

na 0.119 0.080 0.128 0.013 0.014 2.231 435 17

0.121 0.145 0.138 0.198 0.129 2.148

Notes: Regression results on change from 1991 to 2000 for subsistence producers and commercial producers. Coefficients in bold imply significantly different from zero at the 5% level. Coefficients in italics imply significantly different from zero at the 10% level. Underlined coefficients imply different signs for subsistence versus market producers.

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This result makes sense in that the other crops, such as fruits and vegetables for home consumption, are not storable, and may be hard to sell, thus an additional acre goes into more corn production, given they are already growing enough tomatoes. Particularly notable are the results on credit and inputs, which go to our earlier conundrum. Having no credit decreased the amount of corn after NAFTA relative to that produced earlier by subsistence producers, but increased the amount of corn produced after NAFTA by market producers. So it is primarily those producers growing for the market that require credit to switch out of corn production. Presumably this result follows from the fact that producing horticulture or other high-value crops for export production takes a large initial financial outlay, while producing alternatives for home consumption, be they beans or vegetables, does not. However, neither of these coefficients is significantly different from zero. Having access to improved seed (e.g., hybrid varieties) tends to increase the amount of corn grown after NAFTA relative to before for market producers, while it has no effect, or decreases the amount of corn grown by subsistence producers after NAFTA relative to 1991. Thus, it appears as if the determinants of crop choice, and the change in crop choice, are very different for producers growing primarily for their own consumption versus those who grow for commercial purposes. While the marketbased group is affected by inputs, those growing for subsistence are not. Last, there are substantial differences between the two groups within regions. Both subsistence and non-subsistence producers in Chiapas either increased, or at least did not decrease, their relative corn acreage as much as those in central Mexico. However, along the East Coast, subsistence producers were decreasing their corn production, while market producers were increasing their corn acreage. Here we come to the second possible answer to our earlier conundrum: Not all producers producing corn in 2000 are doing so for their own consumption, or because they cannot afford to grow something else. Some producers are growing corn because it makes financial sense, perhaps agronomically, in rotation with higher-value production such as tomatoes, or because there is still domestic demand for the product. Again, note that we find this result before the 2003 price support was introduced by the Mexican government, and before the recent jump in corn prices fueled by ethanol. Last, we consider the entire distribution of the change in percent of land in corn for both subsistence and for non-subsistence producers. As one might suspect, the median subsistence municipality decreased their percent of land planted to corn a small amount, 0.2%, while the median market producer decreased it much more at 3%.

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We look at whether the coefficients were the same for subsistence versus market producers across the entire distribution – thus for regions where corn production increased versus where it decreased. Specifically, we consider the determinants for those producers at the 25th percentile, who decreased the percent of hectares in corn production – an 8% decrease for subsistence producers and a 10% decrease for market farmers – compared to the median, who decreased corn only a small amount, and the 75th percentile, who increased the corn planted by 8% for subsistence producers versus 3% for those growing for the market. Results are presented in Tables 5 and 6. For subsistence producers, the less likely they were to have plumbing, the more likely they were to grow more corn in 2000 relative to 1991 regardless of whether they were increasing or decreasing their production overall. The reverse was true for market producers. The result for market producers might indicate that in areas with majority market-oriented farms, those households without plumbing are working as laborers, not as market farmers themselves. Higher illiteracy meant a larger spread for subsistence producers: those reducing their corn production reduced it more with a higher rate of illiteracy, and those producers increasing their corn production increased it more. The percent of migrants in the municipality had the same effect of spreading the distribution. For market producers, illiteracy had a similar effect, increasing the change in production. In some sense, this result is counterintuitive, since it implies that those producers with less access to information changed their production patterns more. Perhaps some farmers in those areas with high illiteracy rates were exiting farming all together in 2000, which might explain those decreasing their corn acreage, but why illiteracy would lead to an increase in corn production for both subsistence and market farmers is an open question. Not speaking Spanish, on the contrary, tended to make subsistence producers change less. It meant farmers decreasing their corn production decreased it less, while those increasing their corn increased it less. Having access to improved seed, fertilizer, and pesticide tended to decrease the amount that subsistence farmers changed their corn production, while it increased the amount of corn produced by market farmers after NAFTA, regardless of where they were on the distribution. Having access to credit meant that subsistence producers grew more corn after NAFTA, while for market producers, having access to credit tended to enable producers to change their production more. Thus, those market farmers decreasing corn production decreased it more with access to credit, while those increasing it increased it more with credit.

228

Table 5.

PABLO ALVAREZ ET AL.

Quantile Regression Results on Change in Percent of Land in Corn from 1991 to 2000 for Subsistence Producers. 25th Percentile

Median

Decreased corn

75th Percentile Increased corn

Marginality characteristics % households with no plumbing % households with no plumbing squared Illiteracy rate % of people with high school education or more % of people who do not speak Spanish % of habitants who migrated to the municipality

1.030 1.414 0.506 1.542 1.031 3.622

1.498 2.124 1.265 0.789 0.098 6.327

1.393 2.127 0.367 0.684 0.105 3.637

Farm characteristics Farmsize (hectares) Farmsize squared % of land that has no irrigation % of farms without access to credit % of farms without insurance % of farms without a tractor % of farms using improved (purchased) seed % of farms using organic fertilizer % of farms using chemical fertilizer % of farms using pesticides % of farms with technical assistance

0.001 0.000 0.162 0.209 3.473 0.066 0.097 0.084 0.204 0.294 1.226

0.006 0.000 0.026 0.219 3.431 0.171 0.222 0.245 0.764 0.322 2.244

0.008 0.000 0.194 0.083 1.504 0.350 0.230 0.330 0.840 0.151 0.732

0.000 0.303 0.424

0.000 0.083 0.122

0.001 0.107 0.269

na 0.093 0.060 0.031 0.138 0.056 4.375 435

na 0.282 0.274 0.152 0.050 0.027 3.832

na 0.323 0.072 0.330 0.207 0.097 2.235

Access to market Population density (people per farmed hectare) Vehicles per farm % of farms producing primarily for their own consumption Region North West North Central Chiapas Pacific Yucatan Tamaulipas and Veracruz Constant Number of observations

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Table 6.

Quantile Regression Results on Change in Percent of Land in Corn from 1991 to 2000 for Market Producers. 25th Percentile

Median

Decreased corn

75th Percentile Increased corn

Marginality characteristics % households with no plumbing % households with no plumbing squared Illiteracy rate % of people with high school education or more % of people who do not speak Spanish % of habitants who migrated to the municipality

1.561 0.930 0.181 2.239 0.085 9.347

1.198 0.592 1.408 0.302 0.636 2.088

1.262 1.107 2.379 0.304 1.434 1.106

Farm characteristics Farmsize (hectares) Farmsize squared % of land that has no irrigation % of farms without access to credit % of farms without insurance % of farms without a tractor % of farms using improved (purchased) seed % of farms using organic fertilizer % of farms using chemical fertilizer % of farms using pesticides % of farms with technical assistance

0.010 0.000 0.212 0.207 0.464 0.311 0.213 0.046 0.224 0.063 0.918

0.010 0.000 0.009 0.137 0.722 0.000 0.748 0.474 0.071 0.174 0.511

0.002 0.000 0.079 0.080 0.900 0.322 0.610 0.607 0.018 0.376 0.114

Access to market Population density (people per farmed hectare) Vehicles per farm % of farms producing primarily for their own consumption

0.003 0.045 1.188

0.005 0.017 0.992

0.008 0.172 0.468

Region North West North Central Chiapas Pacific Yucatan Tamaulipas and Veracruz Constant Number of observations

1.723 0.124 0.443 0.206 0.498 0.066 0.071

0.634 0.314 0.462 0.238 0.584 0.041 1.150

0.078 0.199 0.255 0.365 0.338 0.062 1.081

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Having access to a vehicle tended to allow subsistence producers to switch, perhaps by providing them access to the market for some of their crops. However, having access to a vehicle had the opposite effect for market producers, where it tended to reduce the amount that producers switched production. Thus, the exact factors that allow a producer to switch production differ between those who were subsistence producers in 1990, and those who were already primarily producing for the market. For subsistence producers, attributes such as vehicles or a tractor helped producers move out of corn, while access to credit and irrigation appeared to help both sets of producers move out of corn production (or, for market producers, into more corn production if they so wished).

CONCLUSION This chapter examines the crop choice of agricultural producers under varying conditions of infrastructure, capital, and labor mobility during the years prior to and in the six years since the inception of NAFTA. We begin with data from 1990/1991, four years before the adoption of the Agreement, and measure again in 2001. These data points allow us to begin well before the Agreement to avoid anticipatory interference and also to measure revenues after the purported effects of the peso crisis of 1994 have subsided. Neoliberal economic theory has argued for the elimination of trade barriers as this leads to increased trade. Implicit in such statements so common in economic literature (Bhagwati & Srinivasan, 2002; Burfisher, Robinson, & Thierfelder, 2002; Hanson, 2007) is the assumption that increased trade leads to increased overall well-being. While some tackle this assumption head-on (Helliwell & Huang, 2005; Rees, 2002), this aim is beyond the scope of this chapter. That said, one clear result of this assumption is that for farmers to be able to benefit from opportunities brought by trade agreements, they need to be able to switch production and access these new markets. If, instead, they cannot transfer out of producing import-competing crops, and they produce more than they themselves consume, they will be hurt by trade reform. Last, those subsistence producers who produce primarily for their own consumption and are net purchasers of staple crops may benefit from the reduction in food prices, although the environmental and cultural effects of this shift are unknown. We find that in general, those producers with larger farms, and more access to insurance and outside information have been able to move out

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of corn production since NAFTA. However, we also see that a number of regions not only did not move out of corn, but increased their corn production substantially. Many of these producers had access to credit and inputs, and while many of them were subsistence producers in 1990, many already produced for the market. Looking more carefully at two states that increased their corn production, Chiapas and Michoacan, we see that the increase in corn production for both subsistence and market producers comes from a drop in land in bean and other staple crops, and in the case of market producers in Chiapas, from a decrease in the land in coffee. At the same time, producers in Sinaloa increased their corn production while also expanding their horticultural production. So, although it may be that in some states corn acreage has increased as it is grown in rotation with highvalue crops, in other states its acreage may have increased because it was the most lucrative of the staple crop alternatives. We then consider the factors affecting subsistence producers and those producing for market across the distribution of change in corn planted. Some variables increase the spread of the distribution, such as illiteracy, irrigation, and credit for market producers, while others, such as pesticides and chemical inputs for subsistence producers, tend to lead producers to continue to grow what they did before. Therefore a policy affecting only credit or access to inputs would not necessarily allow all producers the ability to switch to higher-value crops. In terms of policy implications, a Neoliberal agenda would replace different methods of agricultural support, provided by various government and private bodies, with a single form of support provided only by the free market. As it was, in Mexico, although some government support remains, the Neoliberal reforms did remove technical and credit assistance programs from the government, and turned them over to private industry. The data here show this to be a risky approach for two reasons. First, without government support, we observe that smaller farmers are less able to secure private credit to make the change to new production regimes. Second, subsistence producers react very differently than do those who produce for the market, so programs geared to market-oriented farmers may not be effective for those producing primarily for themselves. Is there room for the small or subsistence farmer in the Neoliberal framework? While economic policy may be implemented immediately, culture and ecology are generally far more sluggish in their responses to such policy changes, especially when segments of the population have diminished access to resources meant to aid in the transition (Aggarwal, 2006). If Mexico and

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other developing countries are going to continue to pursue trade liberalization, governments must retain some public services such as education, technical assistance, and access to credit and insurance, or risk further marginalization of their citizens and vast changes or even elimination of rural culture. Furthermore, these programs need to consider the heterogeneity in farmer characteristics to ensure all can benefit from, or at least not be substantially harmed by trade reforms.

UNCITED REFERENCES Alteiri (2000); de Janvry, Gordillo, & Sadoulet (1996); Harrison & Lerner (1997); Harrison & Hanson (1999); Key, Sadoulet, & de Janvry (2000); Nadal (2002); Nicita (2004); Robinson (2005).

NOTES 1. We specifically use the same denominator – the agricultural surface area for 1991 – for both the planted corn acreage in 1991 and 2000. We use the same denominator for two reasons. First, we want to capture the possibility of farmers leaving land fallow and therefore do not want to limit ourselves to considering planted acreage, which will change. Second, there was inconsistency in the way total planted acreage was calculated for the two years, and we wanted to ensure a consistent denominator. 2. We also weighted the observations by the number of farms, but the results were qualitatively equivalent.

ACKNOWLEDGMENTS The authors thank Shannon Cowan, Alessandro Bonanno, and external reviewers for their very helpful comments on early drafts of this chapter.

REFERENCES Aggarwal, R. M. (2006). Globalization, local ecosystems, and the rural poor. World Development, 34(8), 1405–1418. Baffes, J., & Meerman, J. (1998). From prices to incomes: Agricultural subsidization without protection? The World Bank Research Observer, 13(2), 191–211.

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Bhagwati, J. N., & Srinivasan, T. N. (2002). Trade and poverty in the poor countries. American Economic Review, 92, 180–183. Bonnis, G., & Legg, W. (1997). The opening of Mexican agriculture. The OECD Observer, 206, 35–38. Brayman, M. (2004). Fifteen minutes with Carlos Salinas de Gortari. Business Mexico, 8–15. Burfisher, M. E., Robinson, S., & Thierfelder, K. (2002). Developing countries and the gains form regionalism: Links between trade and farm policy reforms in Mexico. American Journal of Agricultural Economics, 84(3), 736–748. Cord, L., & Wodon, Q. (2001). Do Mexico’s agricultural programs alleviate poverty? Evidence from the Ejido Sector. Cuadernos de Economia, 114, 239–256. de Janvry, A., Gordillo, G., & Sadoulet, E. (1996). NAFTA and agriculture: An early assessment. Paper presentation at the Trinational Research Symposium, NAFTA and Agriculture: Is the Experiment Working? November 1–2, San Antonio, Texas. Firebaugh, G., & Goesling, B. (2004). Accounting for the recent decline in global income inequality. The American Journal of Sociology, 110(2), 283. Fuentes, R. (2005). Poverty, pro-poor growth, and simulated inequality reduction. Human Development Report Office, UNDP. Gallagher, K. P. (2004). Free trade and the environment: Mexico, NAFTA, and beyond. Stanford, CA: Stanford University Press. Hanson, G. H. (2007). Globalization, labor income, and poverty in Mexico. In: A. Harrison (Ed.), Globalization and poverty (pp. 417–456). Chicago: University of Chicago Press and the National Bureau of Economic Research. Harrison, A. (2007). Globalization and poverty. Chicago: University of Chicago Press and the National Bureau of Economic Research. Harvey, D. (2005). A brief history of neoliberalism. New York: Oxford University Press. Helliwell, J., & Huang, H. (2005). How’s the job? Well-being and social capital in the workplace. NBER Working Paper No. 11759. Lederman, D., & Serven, L. (2005). Tracking NAFTA’s shadow 10 years on. The World Bank Economic Review, 19(3), 335–344. Lo´pez, R., Nash, J., & Stanton, J. (1996). Rural poverty and agriculture in Mexico: Monitoring the conditions of Mexico’s poorer farmers, 1991–94. From the conference, NAFTA and Agriculture: Is the Experiment Working? Symposium Proceedings. November. Preibisch, K. L., Herrejon, G. R., & Wiggins, S. L. (2002). Defending food security in a freemarket economy: The gendered dimensions of restructuring in rural Mexico. Human Organization, 61(1), 68–79. Rees, W. E. (2002). Globalization and sustainability: Conflict or convergence? Bulletin of Science, Technology, and Society, 22, 249–268. Rivas, M. (2007). The effects of trade openness on regional inequality in Mexico. The Annals of Regional Science, 41(3), 545. Robinson, W. I. (2004). A theory of global capitalism: Production, class, and state in a transnational world. Baltimore: The Johns Hopkins University Press. Rodrik, D., & Rodrı´ guez, F. (2000). Trade policy and economic growth: A skeptics guide to the cross-national evidence. In: B. Bernanke & K. Rogo (Eds), NBER macroeconomics annual 2000 (pp. 261–338). Cambridge, MA: MIT Press. Sadoulet, E., de Janvry, A., & Davis, B. (2001). Cash transfer programs with income multipliers: PROCAMPO in Mexico. World Development, 29, 1043–1056.

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Taylor, J. E., Yunez-Naude, A., Paredes, F. B., & Dyer, G. (2005). Transition policy and the structure of the agriculture in Mexico. North American Agrifood Market Integration: Situation and Perspectives. Available at http://naamic.tamu.edu/cancun/north_american_ agrifood_market_integration.pdf. Retrieved on April 2007. Topalova, P. (2007). Trade liberalization, poverty, and inequality: Evidence from Indian districts. NBER, 2005. Available at https://www.nber.org/books/glob-pov/topalova8-805.pdf. Retrieved on February 19, 2007. USDA-ERS. (2007). Mexico briefing. Available at http://www.ers.usda.gov/Briefing/Mexico/ Policy.htm. Williams, S. P., & Shumway, R. (2000). Trade liberalization and agricultural chemical use: United States and Mexico. American Journal of Agricultural Economics, 82, 183–199. Wise, T., & Waters, E. (2001). Community control in a global economy: Lessons from Mexico’s economic integration process. Global Development and Environment Institute. Available at http://ase.tufts.edu/gdae/policy_research/CommControl.PDF. Retrieved on November 29, 2006. Wodon, Q., & Yitzhaki, S. (2002). Evaluating the impact of government programs on social welfare: The role of targeting and the allocation rules among program beneficiaries. Public Finance Review, 30(2), 102.

Farm Characteristics Farmsize Farmsize squared % of land that has no irrigation % of farms without access to credit % of farms without insurance

Marginality characteristics % households with no plumbing % households with no plumbing squared Illiteracy rate % of people with more than X education % of people who do not speak Spanish % of habitants who migrated to the municipality

Log of Land in Staple Crops to Total Cropped Area

1.603 3.217

0.539 2.102

2.033 1.321

0.004 0.000 0.190 0.699 0.195

1.005 3.092

1.041 0.853

1.693 2.356

0.000 0.000 0.152 0.248 0.689

1.185 1.940

0.001 0.000 0.535 0.834 0.869

2000 Coefficient

0.725 0.963

Standard error

0.680 0.916

Coefficient

1991

0.001 0.000 0.232 0.319 1.242

2.830

0.643

1.461 1.033

0.959 1.305

Standard error

0.002 0.000 0.262 0.211 0.555

2.639

0.168

0.407 0.643

0.263 0.751

Coefficient

0.001 0.000 0.137 0.194 0.799

2.146

0.370

0.830 0.631

0.605 0.770

Standard error

Difference between 2000 and 1991

Regression results for log of land planted in staple crops compared to all crops on marginality and farm characteristics, 1991 and 2000.

APPENDIX. STAPLE CROPS

Trade and Poverty 235

0.534 0.117 0.137 0.083 0.161 0.095 0.938 1164 51 1.187 0.359 0.026 0.218 0.310 0.288 0.883

0.052 1.474

0.178 0.188

0.394 1.250

0.043 0.094 0.388 0.413 0.688 0.287 0.588

0.001

0.001

0.627 1.155 0.219 1.694

0.228 0.176 0.183 0.522

0.422 0.937 0.131 0.661 0.001

0.739 0.049

0.165 0.223

0.817 0.277

0.580 0.206 0.154 0.135 0.204 0.139 1.568 1048 57

0.286 0.247

0.001

0.309 0.231 0.269 0.692

0.242 0.329

1.094 0.189 0.400 0.135 0.410 0.006 0.223

0.355 0.213

0.001

0.273 0.239 0.032 1.112

0.081 0.240

0.660 0.119 0.107 0.095 0.122 0.095 0.943 1048 18

0.213 0.172

0.001

0.207 0.142 0.153 0.559

0.157 0.208

Notes: Coefficients in bold imply significantly different from zero at the 5% level. Coefficients in italics imply significantly different from zero at the 10% level.

Region North West North Central Chiapas Pacific Yucatan Tamaulipas and Veracruz Constant Number of observations R2

Access to market Population density (people per farmed hectare) Vehicles per farm % of farms producing primarily for their own consumption

% of farms without a tractor % of farms using improved (purchased) seed % of farms using organic fertilizer % of farms using chemical fertilizer % of farms using pesticides % of farms with technical assistance

(Continued )

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CHAPTER 8 CONCLUSIONS: THE CONTRADICTIONS OF THE RECONFIGURATION OF TIME AND SPACE Alessandro Bonanno and Josefa Salete Barbosa Cavalcanti ABSTRACT The studies presented in this volume are examples of the manner in which globalization reshaped social relations in the agrifood sector. In this concluding chapter, two fundamental points are presented. They are offered as a synthesis of the empirical evidence characterizing the contributions contained in this book and wish to add to the on-going discussion on globalization. The first of them refers to the fact that as capital moves at accelerated speed and reconfigures time, space, and social relations, it creates new contradictions. Second, these contradictions negatively and disproportionally affect subordinate groups. Dwelling on these two points, it is concluded that these contradictions also open up possibilities for emancipatory change as dominant groups are not free from situations that limit their actions.

Globalization and the Time–Space Reorganization: Capital Mobility in Agriculture and Food in Americas Research in Rural Sociology and Development, Volume 17, 237–250 Copyright r 2011 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1057-1922/doi:10.1108/S1057-1922(2011)0000017011

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The cases illustrated in this volume are exemplary of the ways in which globalization has reshaped social relations in agriculture and food. Two points can synthesize the empirical evidence presented so far. First, as capital moves at accelerated speed and reconfigures time, space, and social relations, it creates new contradictions. Second, these contradictions affect disproportionally subordinate social groups. However, they also open up possibilities for emancipatory change as dominant actors are not free from limits or problems. In this concluding chapter, we would like to explore these two aspects of the reorganization of time and space and the consequences of capital mobility under globalization.

THE GLOBAL REGULATION AND CONTROL OF CAPITALISM The cases presented in this volume support the contention that the time/ space relation that emerged under globalization is centered on an accelerated capital turnover time and on a scope of capital mobility that transcends the nation-state-based system of the Fordist era. The cases show that the production of agrofood commodities and the use of labor to manufacture them and the local socioeconomic conditions under which this production is generated all feature dimensions that transcend the Fordist space and time. This production requires international circuits; interdependence among corporations, producers, and consumers; high levels of mobility of capital; and limited regulation from nation states. Simultaneously, it requires the active intervention of the nation state to open up markets for the rapid circulation of these commodities. Accordingly, these cases indicate that social relations have been altered, as established institutions and practices do not match the new parameters of the scope and velocity of capital mobility. While capitalism remains the dominant mode of production and the search for profit guides its development, the ways in which capital move through time and space have acquired new characteristics. Simultaneously, the Fordist mechanisms that worked to regulate capitalism and control its contradictions are no longer effective or practicable. In this context, however, empirical evidence indicates that the requirement to maintain forms of control and regulation of capitalism remains. It also indicates that the new institutions and practices that attempt to control and regulate capitalism have not been able to perform these roles with sufficient effectiveness. Accordingly, the limited

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success of these new institutional forms of control and regulation of capitalism creates contradictions and new contested terrains where the evolution of social relations is adjudicated. Overall, supporters of globalization celebrated the end of Fordism and its ‘‘regulated capitalism’’ as the beginning of a new and much prosperous era. Based on the adoption of neoliberal measures and embracing the concomitant call for the dismantling of the interventionist nation state, the globalization project centered on the idea of the free market as the ultimate regulator of capitalism and the system through which its unwanted consequences could be controlled. In his now classical work the End of History, Francis Fukuyama (1992) spoke about the advantages of a free– marked-based system to counter the distortions and rigidities generated by the Fordist interventionist state. Stressing a much less radical version of the virtues of the unregulated market (i.e., Friedman, 1982),1 Fukuyama believed that the open market of the post-Berlin Wall could address the unwanted consequences of the expansion of capitalism. While aware of the problems arising from social and economic inequality, he contended that stressing state intervention in social matters opens the way for ‘‘infinite abuse of the democratic principle.’’ In his view, postwar liberalism’s efforts to reform, redistribute, and regulate are prone to authoritarian abuses rivaling communism. Simultaneously, he maintains that competitive capitalism allows the most able, ambitious people to rise to the top and create wealth that benefits everyone (Fukuyama, 1992, pp. 43, 289, 316). In his view, economic inequality follows inevitably from people getting their just deserts; thus, populist reactions to increased inequality does not call for economic reform or redistribution, but for efforts to allow the market to function properly. Finally, Fukuyama suggested that the ability of the free market to deliver consumer goods would be sufficient justification of social arrangements for the vast majority of average citizens. To be sure, Fukuyama’s optimism about the ability of the free market to regulate globalization and control its negative consequences was relatively short lived. It could not provide the overall justification for the overt contradictions that globalization engendered. As we discussed in the cases presented here, the negative consequences of rampant illegal immigration, the vulnerability of local agricultural communities, and the overwhelming power of transnational corporations could not be explained, addressed, and ultimately legitimized through the simple reference to the functioning of market mechanisms. From a corporate view point, the idea of the market as the ultimate regulatory entity was never abandoned. Yet, the complexity of global arrangements and the problems that transnational corporations

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encountered in operating in a liberalized global economy engendered calls for more effective forms of regulation. Capturing the corporate mood of the early years of globalization, the former executive Alex Rubner (1990) claimed that corporations have a ‘‘weak’’ position in the global economy that does not allow them to take full advantage of the benefits of the free market. He contended that globalization’s much more accelerated, expanded, and interdependent economic interactions, which lack centralized regulatory authority, requires some form of business-friendly reregulation to reduce the risks associated with corporations’ global movements and transactions. Sharing these concerns, corporate leaderships and their allies proclaimed the antiregulatory zeal of free-market ideologues contradictory to corporate goals and profitability and supported the creation and strengthening of global regulatory organizations. These institutions took a number of forms. There was the creation of global trade organizations such as the WTO, continental trade agreements such as NAFTA, global political organizations such as the G8 (G20 in 2009), and the redesigned presence of established organizations such as the IMF and the World Bank. As it was documented in the agrofood cases illustrated earlier, these institutions contributed to the reregulation of capitalism worldwide and impacted the everyday life of many social groups in different ways. They also received the support of scientific accounts and the endorsement of political groups that heralded their presence as a fundamental vehicle for the creation of a much needed stability in international markets.2 The strengthening of these new regulatory institutions was accompanied by the claim that this reregulated globalization was a perfect framework for the coexistence of democracy and economic well-being. Often defined as the Washington Consensus, this ideology heralded a ‘‘third way’’ of managing capitalism and society that was centered on wide open-market participation and unprecedented levels of market self-regulation. Through a number of works and in particular with his ‘‘The Lexus and the Olive Tree,’’ Thomas Friedman (2000 see also 2006) championed the Washington Consensus. He contended that neoliberal privatization, deregulation, and securitization created a worldwide direct democracy of finance capitalists, professionals, and investors, who voted daily with their financial moves. This ‘‘electronic herd’’ of market participants had immediate access to information and ability to act that best approximate the neoclassical ideal of perfect markets. This new economy extended opportunities to able people in all parts of the world to become wired and market players and reduces economic inequality among countries. The net result was that the process removed power from government and returned it

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to individuals. Holding that ‘‘Americanization-globalization’’ required ‘‘American internationalism’’ in political and military affairs, Friedman portrayed the United States as ‘‘benign hegemon’’ of the globalization system; its leadership role in NATO protected the globalization system against violent antimodern outliers, and dominance in international economic regulatory institutions advanced neoliberal reforms and provided coordination and support for the globalization’s complex interdependence.

THE TWO KEY CONTRADICTIONS The evidence presented in this book – but also other events such as 9/11, the market crash of 2000–2001 and the more serious and prolonged one of 2008– 2009, and the many corporate scandals such ENRON, World.Com, Bernie Madoff, etc. – demonstrate the limits of these regulatory institutions to control global capitalism. In this context, Friedman’s idea that the presence of active intervening investors and consumers could allow corporate selfdiscipline and safe global governance was shattered by corporate attempts to manipulate the market, fraud and deception, rampant speculation, financial uncertainties, increased economic concentration, social polarization, and marginalization. Additionally, resistance to globalization mounted in a number of arenas. From that of the now differentiated antiglobal movement to the much extreme religious fundamentalism, to consumers’ concerns about quality of global production,3 the globalization project and its Washington Consensus version were severally challenged. After 9/11, geopolitics and security issues took over center stage in discourses about globalization. However, a split occurred among the group that supported the Washington Consensus. Departing from views expressed by other international political entities (most notably many European and Southern countries), the Bush Administration, supported by a few allies, introduced a new strategy about controlling and regulating globalization. Based on the ability and right of the United States to act unilaterally, it maintained that the United States could and should act freely in accordance with its hegemonic position. In a ‘‘unipolar’’ world, the United States was called to employ its overwhelming military and political powers to secure its interests. These interests, however, were viewed not simply as American interests. They were everybody’s interests as American objectives reflect values that ‘‘are right and true for all people everywhere’’ (U.S. Department of State 2002, p. 3). Because American interests and views were considered beneficial to the rest of the world, the Bush Administration believed that the

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‘‘civilized world’’ would ultimately follow the US lead even when it acts alone. In this context, the American version of free-market economics and world view represented the essence of human freedom and was the only workable model for world progress and stability (U.S. Department of State 2002, pp. 3, 17, 18). The American objective to support globalization was seen as a ‘‘gift’’ to the world and a self-evident truth, and those who questioned or opposed it were to be considered antidemocratic and a threat to the existence of a ‘‘civilized’’ and ‘‘peaceful’’ world (U.S. Department of State 2002; Harvey, 2006). The security of this civilized world was transferred in the hands of state agencies. They were given power to investigate with minimum regard for basic liberties. This situation in which ‘‘liberties’’ were diminished was viewed as ‘‘actually’’ generating freedom as it stroke at the core of the enemies of civilization and democracy. Ultimately, this posture called for the United States to reject calls for more consensus and negotiation, if they sacrifice neoliberal interests. In this context, the Washington Consensus vision of globalization forging peaceful global integration, assuring higher living standards, generating market-based means of social welfare, and creating an investor-run, electronic, participatory democracy appeared much more unrealistic than it did when it was first proposed. The election of Barack Obama to the presidency and the prolonged recession that preceded and followed the beginning of his presidency severely delegitimized this version of globalization. They indicated the limits of the unilateral approach to globalization proposed and directed by the United States and, more importantly, stressed the difficulty of governing a global system relying on unchecked market forces. They paved the way for a new role to be played by the state. But they also posed a number of questions on the modalities of, and extent to which, a return to strong state intervention is possible in an increasingly more global economy and society. As these questions are debated in appropriate arenas, we think it is important to keep in mind the importance of social interdependence and the effective coordination and regulation of capitalism as key aspects defining the future of society. These are also the items that emerge from the analyses produced in the volume. We turn to them as we continue this final chapter.

INTERDEPENDENCE The empirical evidence presented in this volume’s case studies is clear about the continuous importance of interdependence in the global system.

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Agrofood production depends on the availability of cheap and controllable labor and its ability to produce commodities following requirements dictated by global corporations and viewed as desirable by distant consumers. This interdependence constitutes the most fundamental condition through which fresh fruit is produced in Brazil and consumed in Europe, or Salmon is raised in Chile and consumed in North America. Interdependence is also manifested in the creation of immigration flows whereby labor is guaranteed by the availability workers in centers of production in the North and in the South. It can be said, then, that the crisis of the Washington Consensus and the unilateralism of the Bush doctrine clash with the enhanced need for social interdependence called for by accelerated forms of capital mobility.4 This situation creates the first of the two key contradictions that we would like to discuss in this chapter. Analyzed in a number of theoretical frameworks by both classical and contemporary sociologists,5 interdependence among social groups has always been a key feature of the evolution of capitalism. As indicated in the introduction, Marx pointed out that the existence of interdependence is a central feature of the expansion of capitalism. It is also a condition that is threatened by capitalism’s continuous motion to expand its boundaries and colonize new spaces. Under Fordism, social interdependence was largely maintained through the existence of an active nation state that intervened in economic and social activities. This intervention limited the centrifugal forces of capitalism and permitted the control of labor, its mobilization to meet the demands of an expanding production, as well as its augmented participation in the consumption sphere. It also allowed workers’ greater presence in the civil society and state, substantially expanding participation in decision-making and democracy. Ultimately, the nation state’s constant attempt to balance production and consumption engendered stability for capitalism. The Fordist state – legitimized by modernization theories – also promoted the existence of institutions and cultural practices that enhanced the living conditions, social peace, and expectations and hopes for a more prosperous future. These conditions defined the situation in the advanced North and were coupled with widespread poverty and underdevelopment in the economic South. Yet, dominant modern theories of development and related policies were based on universalistic designs that contemplated growth for all regions and groups. Regardless of their ideological camp,6 theories of development all aimed at eradicating inequality and promoting cooperation and interdependence through the establishment of programs designed to elevate the economic and social conditions of less developed

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regions. As results varied, and in many instances increased underdevelopment, they also generated advantages for subordinate groups that were later radically eliminated by neoliberal globalization.7 These processes and programs were viewed as ‘‘rigidities’’ by globalization advocates and were eliminated as neoliberal postures were adopted world wide. As spatial and temporal spheres of capital mobility were expanded and required enhanced social interdependence, those mechanisms that fostered interdependence gradually disappeared. Enhanced market competition, the rampant exploitation of natural resources, and the marginalization of large segment of labor were left as the key aspects of global capitalism. This situation created a multifaceted polarization – including among other things, wealth concentration versus poverty; concentration of exploitation of natural resources versus lack of access to natural resources; participation in decisionmaking processes versus political marginalization – that affects groups within and across spatial enclaves. The contradiction between the increased demand for interdependence and increased polarization and unilateralism that counters it remains open in the global era. In the agrofood sector, this contradiction is arguably very visible. It is visible in the increased creation of labor demand that is met by a marginalized and highly controlled labor force. From the Canadian rural space, to the fields of Brazil and Southern Mexico, to the farms of Argentina, global agrofood production creates more precarious, unstable, and poorly remunerated employment than the enhanced production and greater market outlets would allow to assume. The Fordist correlation between economic expansion and social well-being has been reversed in global agrofood production. It is also visible in the spatial reorganization of communities. The existence of production centers is not accompanied by the development of socioeconomically viable communities. As the exploitation of natural and human resources is augmented by the creation of global circuits, production decentralization, and diminished local and national state control, the ability of rural and agricultural communities to support themselves is made increasingly precarious. With the global reorganization of time and space, social interdependence is threatened and with it the ability to create sustainable socioeconomic growth.

COORDINATION AND REGULATION The second contradiction rests on the fact that nation states’ attempts to control and regulate capitalism are hampered by enhanced capital mobility

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and their own adoption of neoliberal postures. In this context, however, the reproduction of capital and its social legitimation continue to require effective coordination and regulation. As indicated in the introduction, the creation of national and later international markets demanded the establishment of coordinating and regulating entities such as the nation states. And, as stressed by Marx, Weber, and other classical and contemporary scholars, it was the capacity of nation states to homogenize, standardize, and legitimize production and consumption activities, and create the necessary technical, legal, political, and social infrastructures that permitted the continuous growth of capitalism. These were also the conditions that allowed capitalist expansion and social stability under Fordism. Marx also pointed out that the ultimate dimension of capital mobility is global and that capital tends to transcend any given organized space. As the nation state organizes and regulates capital within its domestic and international spheres of influence, the requirement of capital to colonize new spaces in an accelerated time makes this coordination and regulation effort limited at best. Accordingly, the organization and regulation of capital under globalization cannot be fully addressed by the nation state. From the expanded demand for energy, to migration, to security, to the ecological crisis, the forces of globalization have created levels of social and economic instability and volatility that are unprecedented in history.8 As qualitatively enhanced scopes and velocities of circulation of capital create these new problems, both the free market and new institutional forms of regulation and control of capitalism failed to satisfy even the most fervent supporters of global capitalism.9 In this context, the demand for regulation and control of unwanted consequences of capitalism comes from a number of actors in opposite camps. Dominant groups – such as global corporations and their political allies – seek to create a ‘‘stable’’ global economic, political, and social environment in which global capital mobility can be exercised without damaging restrictions. Global corporations seek conditions in which their ability to search for, and take advantage of, the most convenient factors of production world wide is accompanied by the desire to enter and/or create new markets and protect against all forms of resistance. The move to dismantle Fordist ‘‘rigidities’’ was aimed specifically at achieving this system of enhanced capital mobility. But an efficient system of global corporate ‘‘protection’’ is also required and has yet to be established. As a new world economic crisis began in 2008, calls for regulation against the perils of the free market were issued by a variety of corporate sources. At that year’s

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World Economic Forum in Davos, Switzerland, for instance, the multimillionaire George Soros spoke of the need to create mechanisms for the coordination of economic policy and criticized economic policy organizations such as the US Federal Reserve for lacking the intent and capacity to intervene to regulate the global economy. ‘‘Financial markets do not tend toward equilibrium. This is a misconception,’’ he also added, showing the widespread dissatisfaction for the current status of the regulation of the economy that strongly emerged from the Forum (Perry 2008, p. D6). Similarly, other supporters of globalization viewed reliance of the free market as ineffective strategy toward economic stability and growth (see Friedman 2009). Calls for regulation and control of capitalism come also from subordinate groups – including class-, gender-, and race-based groups. Damaged by the end of Fordism and the rampant deregulation associated with globalization, subordinate groups have been searching for conditions that would allow them to improve their positions in society. Under Fordism, they were able to employ established avenues to channel their claims toward equally established counterparts: the nation state and firms. As globalization altered these conditions, the nation state became increasingly ineffective and unwilling to address these claims while global sourcing and capital hypermobility allowed corporations to often by-pass and/or disregard many of these claims. As a result, these opposing demands for regulation and control of capitalism are met by an institutional vacuum in which nation states cannot effectively respond to the requests of corporations and subordinate groups alike and the working of transnational institutions engenders dissatisfaction and/or opposition. Greater demand for interdependence and the call for institutions that could effectively control unwanted consequences of capitalism are contradictions that cannot remain unaddressed. They require attention because it is difficult to imagine a pattern of sustainable socioeconomic development that does not contemplate their solution. The global economy expands through the creation of new spatial links and networks that accelerate the reproduction of capital. But this growth creates consequences that are difficult to control by nation states and international organizations alike. This situation disproportionally affects subordinate groups. Large segments of the world population suffer from the effects of deteriorating environmental conditions, world economic competitions, political unrest, and migration. As socioeconomic polarization and marginalization

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increases, opportunities for secure and stable employment and well-being are countered by the instability of globalization. At the same time, though, it would be erroneous to assume that the existence of these contradictions is simply beneficial to dominant groups. While the global dominant class has disproportionally increased its power and wealth, these contradictions hamper this class’ ability to reproduce capital. Global uncertainties and volatility affect the planning, coordination, and execution of production processes whereby they run counter to the creation of environments amenable to capital investments and commodity production. Concomitantly, they also affect the fostering of consumption growth and social stability required to absorb expanded production. In effect, global uncertainties and volatility prevent the balancing of production and consumption necessary for capital accumulation. US unilateralism and the rampant exploitation of subordinate groups and natural resources are not adequate responses to this situation as they increase socioeconomic polarization and reproduce the overall climate of global uncertainty. While some segments of the ruling global class are entrenched in maintaining this conduct, others have displayed great awareness of the need for change. In effect, criticism to US unilateralism, the Bush doctrine, and corporate exploitation of human and natural resources have emerged from many sides of the political and economic spectrums. In this context, limited interdependence along with limited coordination and regulation of capitalism represent contradictions that can be employed to developed successful resistance and the creation of alternative patterns of development. They are as such because now more than ever capital accumulation cannot be effectively carried without the cooperation of subordinate groups. In an environment in which current patterns of globalization are delegitimized and unsustainable, greater cooperation and interdependence along with effective forms of coordination and regulation of capitalism represent fundamental objectives for the dominant classes. The spaces where interdependence, coordination, and regulation will be defined are the new contested terrains. These are the locations where global relations materialize. That is, these are the regions and local areas in which key components of the global production and consumption networks are placed into existence. Because of the lack of strong coordinating and regulating entities, these localities and the social actors that operate within them may experience more rather than less power. It is their ability to exercise this power in relation to the limits of the power of corporate actors that qualifies the extent to which they will be

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able to impose alternative outcomes. These are contested terrains because it is here that groups have the opportunity to propose and practice different ways to link with global networks and globalization as a whole. It is the exercise of the ability to transform current contradictions into opportunities for emancipation that will define the future of the global society.

NOTES 1. According to Milton Friedman and likeminded members of the radical neoliberal school, any interference to the free functioning of the market generates negative consequences. For instance, speaking of the state practice to regulate professional activities, Friedman contends that medical doctors should not be required to obtain a state license. It would be the market of patients that would ‘‘license’’ capable doctors by requesting their services. Simultaneously, less skilled physicians would be sanctioned by not receiving the same requests from patients. In this understanding, welfare programs are items that discourage poor individuals from working but also the provision of services in much more efficient and costsaving manners. Fukuyama’s analysis departs from this radical vision by acknowledging the importance to address existing social and economic disparities. 2. As indicated by the some of the literature reviews presented in the previous chapters, the regulatory power of the free market was criticized predominantly from the Left. Left critics argued that the very substantial increases in corporate profit and upper-class wealth did not result in significant wage growth for most people and the gains from international trade went mostly to investors. The critics contend that inequality continued to grow and that productivity-gain benefits were monopolized by the wealthy. Most importantly, they argue that free-market-regulated globalization perpetuated later 20th-century trends that hurt working people, for example, declining job quality, security, and benefits, reduced holidays, increased work hours, more authoritarian workplaces, and increased insecurity. They say that income and productivity gains were no miracle, being far below those of the pre-1973 postwar boom and even below those of the crisis-ridden 1970s. The critics hold that economic expansion did not derive from a New Economy, but resulted from labor’s weakness, for example, low union membership and weak unions, the threat of capital flight, and global competition that kept wage pressures low (Pollin, 2003). A number of the cases presented in this book documented the same point and showed that neoliberal restructuring negatively affected peasant groups, small producers, and wage labor particularly in less developed regions. 3. The case of the global salmon illustrated in this book is an instance of the growing problems associated to global food production. Increasing concerns over the global production of affordable food constitutes one of the major oppositions to globalization. Obviously, there are radical differences between opposition based on violent actions such as those exercised by radical fractions of religious fundamentalism, and opposition based on quality of life and consumption such as that

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represented by critics to food production. It can be argued, though, that the latter represents a much more effective opposition to globalization forces. 4. This clash remains relevant even as the Obama Administration in the United States and other world leaders take new postures toward globalization. 5. Also the works of other classical sociologists, such Weber and Durkheim (and only to mention two of the founding fathers of sociology), stress the fundamental importance of interdependence in the expansion of society. While they all considered it difficult to maintain as society evolves, they also argue that society cannot grow without the establishment and maintenance of interdependence. 6. In the development debate, the sharpest opposition was between functionalist theories of modernization and Marxist theories of dependency and uneven development. However, in spite of the diverging analyses and proposed solutions, these and other camps all maintained the notion of the possibility and necessity of universal socioeconomic growth. In this respect, interdependence was considered not only a historical variable but also a condition for development. 7. The agrofood sector represents one of the most evident examples of the consequences of ‘‘modernization’’ programs. While social and economic inequality remained and even grew, infrastructure building, land redistribution, labor programs, and other similar measures benefitted underprivileged groups. In Mexico, for instance, state intervention and international programs allowed the existence of the ‘‘ejido’’ program that permitted the continuous existence of a significant peasant population in the absence of real alternatives in urban centers. Similarly, state intervention created infrastructure that provided impetus to agricultural and food production (Aboites, Bonanno, Constance, Erlandson, & Martinez, 2007). 8. Simultaneously and acknowledging growing socioeconomic inequality, the consequences and externalities associated with these phenomena are shared globally, and no one region or group can claim immunity from them. 9. For a detailed discussion of these market-based attempts to regulate and organize global capitalism, see Antonio & Bonanno (2007).

REFERENCES Aboites, G., Bonanno, A., Constance, D. H., Erlandson, K., & Martinez, F. (2007). La Construccio´n de Resistencias en UN Mundo Global. Mexico City: Plaza y Valde´s. Antonio, R. J., & Bonanno, A. (2007). Globalization and the new legitimation crisis. Paper presented at the Annual Meeting of the Midwest Sociological Society, Chicago, IL, April. Friedman, M. (1982). Capitalism and Freedom. Chicago: University of Chicago Press. Friedman, T. L. (2000). The lexus and the olive tree. New York: Anchor Books. Friedman, T. L. (2006). The world is flat: A brief history of the twenty-first century. New York: Farrar, Strauss and Giroux. Friedman, T. L. (2009). The price is not right. The New York Times. Available at http:// www.nytimes.com/2009/04/01/opinion/01friedman.html?_r¼1. Accessed on April 28, 2009.

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Fukuyama, F. (1992). The end of history and the last man. London: Penguin Books. Harvey, D. (2006). Spaces of global capitalism. London: Verso. Perry, D. (2008). Billionaire sees downturn as end of era. The Houston Chronicle, January 24, p. D6. Pollin, R. (2003). Contours of Descent: U.S. Economic Fractures and the Landscape of Global Austerity. New York: Verso. Rubner, A. (1990). The might of the multinationals. The rise and fall of the corporate legged. New York: Praeger. U.S. Department of State. (2002). The national security strategy of the United States of America. Available at http://www.state.gov. Retrieved on September 17, 2002.