Territorial strategies of forestry and agricultural corporations in Uruguay – the Southern Cone region of Latin America

ABSTRACT

Agribusiness is the main mechanism of spatial fix for international capital in the Uruguayan agricultural sector. Transnational corporations are the driving force behind the most significant agricultural transformations witnessed in the twenty-first century. The objective of this study is to gain insights into the territorial strategies employed by agribusiness corporations in Uruguay and to identify the resultant territorial changes linked to their expansion. The findings of this study reveal that these corporations: (i) prioritise the expansion over efficient territories with favourable agrarian structures; (ii) they significantly alter the preexisting agrarian structure – establishments size, intensity of land use and socioeconomic relationships; (iii) they give rise to new territorialities characterised by one-way agrarian transitions towards more capital-intensive uses. These transitions are linked to the intensification of land use, mounting pressure on land prices, and the deepening of processes of proletarianisation. This study stands as a significant milestone, as it is based on georeferenced data from land managed by companies. It provides evidence to support the argument that corporate encroachment in Uruguay exacerbates the processes of land concentration and exclusion, thus affecting the equitable distribution of wealth and resources. The article provides a general framework that can be applied to understanding corporate expansion in other regions.

KEYWORDS:

• agribusiness; territorial transformations; commodities; land grabbing; accumulation by dispossession

ACKNOWLEDGEMENTS

The authors express their gratitude to Camila Fernández Nion for her insightful reading and comments on the manuscript. In addition, they thank the four anonymous reviewers and the editor for their valuable contributions, which significantly improved the quality of this manuscript. ID was supported by the National Researchers System (SNI-ANII-Uruguay) and PEDECIBA-Geociencias.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the author(s).

Notes

1 Refers to the ‘authority and power relationships that determine how financial, material, and human resources are allocated and flow within a chain’ (Gereffi, 1994).

2 In this article, following Borras, Kay et al. (2012), Oyhantçabal and Narbondo (2019) and Díaz et al. (2023), land grabbing is understood as a global process which manifests at the local level. It refers to the control of extensive areas through economic or extra-economic mechanisms, involving capital on a large scale and extractive use of resources. Land grabbing also has the aim of appropriating the growing income of land, investing in land to store and increase the value of assets, the patrimonial reserve and using land as a financial asset.

3 Sociedades Anónimas (S.A.) are commercial legal entities used for engaging in productive and commercial activities, whose capital is divided into shares (registered or bearer) that represent the participation of each partner in the total capital of the entity. Many S.A. allow shareholders to remain anonymous by representing their ownership through bearer shares. With the potential to encompass dozens or even hundreds of shareholders, an S.A. typically exhibits a decentralised structure.

4 In this paper the term corporations will be used exclusively to refer to bearer share corporations.

5 The S.A. do not include all the legal forms under which agribusiness operates, but it is the form under which investment funds (Ceroni and Oyhantçabal, 2022) and the largest forestry and agricultural companies operate in Uruguay. These S.A. heavily influence the main dynamics of the forestry sector (in the agricultural and industrial phase) and of agriculture (Díaz et al., 2023).

6 Law 18,092 (2007) and its implementing Decree (No. 225/007 - 2007) regulate access to land for S.A. with bearer shares. Registered share S.A. are not limited to accessing land in Uruguay. In this paper, only the S.A. included in Law 18,092 will be analysed.

7 Information on companies and lands to be managed by them is collected by the Ministry of Livestock, Agriculture and Fishing (MGAP), given that bearer share corporations that intend to operate in the Uruguayan agricultural sector must request an exception (Law 18,092). Information on many of these requests, and an important part of the companies' information, is found on the MGAP website available at https://www.gub.uy/presidencia/tematica/ministerio-ganaderia-agricultura-pesca

The information not available on the website was requested from the MGAP under the law of access to public information.

8 Includes: land ownership characteristics, main productive activities carried out, forms of production (techniques, technology, infrastructure, etc.) and rural population and workers.

9 The Banco de Previsión Social (BPS) is an autonomous entity that coordinates the state's social forecasting services and organises social security. The data analysed in this article refer exclusively to formal workers, which depends on the number of jobs, the degree of formalisation and the inspection policy.

10 It incorporates the following companies in Uruguay: Nuevo Manantial S.A., Estancial del Lago S.R.L., Agroland S.A., Gamorel S.A., Porto Velho S.A. and Finca La Quebrada S.A. They engage in agricultural, dairy, fruit, wine and tourist activities.

11 The parameter that summarises information based on equivalences in herbivore consumption. In Uruguay, one livestock unit corresponds to the dietary requirements of a 380 kg cattle. Livestock units (LUs) data were obtained from DICOSE-SNIG (MGAP) affidavits: https://catalogodatos.gub.uy/dataset/?tags=DICOSE

12 It involves a project aimed at acquiring rural land in Uruguay, encompassing livestock, agricultural-livestock, agricultural and rice-specific holdings. These acquisitions are intended to facilitate the implementation of diverse productive activities conducted through leasing arrangements.

13 Only companies for which there is information about the sector and location of operation were considered.

14 Differential rent I arises from differences in soil fertility and location, and differential rent II arises from the productivity of successive capital investments (Kautsky, 1988).

15 Forestry Law No. 15.939 establishes that ‘those soils which, due to their properties, aptitude, climate, location and other characteristics, are unsuitable for any other permanent and profitable exploitation or use, shall be considered of forestry priority’. Additionally, productivity of areas of forest priority was obtained from Annunziatto, Petraglia, and Tommasino (2016):

16 DGNR-MGAP (2014). Shapefile of ‘Summer Crop Zoning’.

17 Productivity Index of CONEAT areas. DGRN, 2020.

18 Refers to the increased use of capital for agricultural production. It also implies greater pressure on natural resources.

19 UPM website is available at https://www.upm.uy/ and Montes del Plata website is available at https://www.montesdelplata.com.uy/espanol/

20 According to Fernández-Nion (2021), Group 1: Farms smaller than 500 hectares, mostly less than 200 hectares. Ranked second in the country in terms of the relative area of intensive agricultural use (horticulture, orchards, dairying and dryland farming) and third in terms of agricultural machinery. High participation of natural persons in management and very low participation of capitalist companies. Intensity index according to Gazzano et al. (2019) higher than 4. Group 2: Farms smaller than 1000 hectares, mostly with less than 500 ha. Ranks first in the country in terms of the relative area of intensive agricultural use (dry farming and dairy farming) and first in terms of agricultural machinery. Participation of individuals and capitalist companies in the management of exploitation at the national average. Intensity index according to Gazzano et al. (2019) greater than 5.5 (highest in the country). Group 3: Farms larger than 1000 hectares, mostly with low-intensity use (livestock). It ranks last in terms of use of agricultural machinery and intensity of use, according to Gazzano et al. (2019). Participation of individuals and capitalist enterprises in the management of exploitation around the national average. Group 4: farms larger than 1000 hectares, which occupy the second place at the national level in terms of the relative importance of intensive agricultural use (dry farming and use of agricultural machinery). Low participation of individuals and high participation of capitalist companies in the management of the exploitation. Intensity index according to Gazzano et al. (2019) greater than 3.

21 Data from minimum census area, obtained from the DIEA YEARBOOKS for 2011 to 2020.

22 Data from minimum census area, obtained from the DIEA YEARBOOKS for 2011 to 2020.

23 Colonos are individuals aspiring to become settlers under the National Colonization Institute (INC), who participate in public competitions to secure a land parcel for agricultural purposes.

24 Oyhantçabal and Sanguinetti (2017) estimate an increase in overall land rent appropriated by landowners from US$349 million to US$1658 million per year between 2000 and 2015.

25 Through the Investment Promotion and Protection Law No. 16,906 (1998), through tax benefits for foreign investment, US$4721 million were exempted from the agribusiness sector between 2010 and 2020. Source: https://www.uruguayxxi.gub.uy/