In Uruguay, as in all other countries in the region, the expansion of single-crop agriculture (monoculture) combined with the powerful presence of agri-multinationals, has led to the creation of new power blocks. This in turn creates a policy environment where important decisions are made to facilitate these groups. When compared with its neighbors, Brazil and Argentina, Uruguay has demonstrated a record increase in the use of agricultural land for soybean monoculture. Since 2003, soy land-use has multiplied 15 fold. In this short period, soybeans have displaced traditional crops, such as sunflowers, wheat, and sorghum—accompanied by parallel changes in agricultural practices, soybean monoculture is becoming the rising star in its field. However in Uruguay this is by no means the only change in agriculture since the 2002 financial crisis. As Mexican tycoon Carlos Slim recently put it, "A crisis is an opportunity."1 Because of this crisis, since 2002 fully one-quarter of Uruguay's arable land has passed into foreign ownership. Argentine capital flows are responsible for the largest purchases, now controlling half of all Uruguayan soybean production. Soybeans are by no means the only sector experiencing such changes. Uruguay's most important agricultural sector, the meat industry, has come under the control of Brazilian capital; the same has happened with rice, the country's largest export crop. The Power of Soy In Uruguay's 2001-2002 season there were only 28,900 hectares planted with soybeans. In the current season there are now 450,000 hectares planted, and some think this number could reach a million. To understand how such extreme rapid growth is possible, one only needs to look at Argentina, whose investors in the sector control 54% of soybean cultivation in Uruguayan territory as well. The price of land in Uruguay is half that of Argentine land and in Uruguay there are no export taxes.2 Although the Uruguayan land has lower productivity, the higher taxation imposed recently by the government of President Cristina Fernandez, the excuse for the current conflict with the Argentine farming sector in Argentina, seems destined to increase the agro-industrial wave of investment coming to Uruguay from Argentina, which began in 2003. The River Plate coastal area is Uruguay's premium agricultural land. Soybean cultivation here has displaced cattle ranching for meat production and is now threatening dairy production. Of the 16 million hectares available for farming in Uruguay, 13 million are used for cattle ranching; one million for arable farming and another million are destined for forestry. Cattle ranching has been losing 350,000 hectares each year to expansion of soybean plantation and it is thought that it may fall to nine million hectares (as arable land use will rise to three or four million hectares). In the 1950s the number of hectares of arable land reached 1.6 million hectares, to fall to a minimum of 400,000 hectares in 2001.3 In the current harvest, "six companies, mostly foreign or related to foreign capital, sow approximately 25% of the arable land."4 The "Grobo group" alone (owned by Argentine Gustavo Grobocopatel) has 40,000 hectares planted with soybeans using the company name "Agronegocios del Plata." They're not alone: the "El Tejar" group cultivates 50,000 hectares, half with soybeans; "MSU" (Manuel Santos Uribelarrea) and the "Ceres Tolvas and Calyx Agro" (linked to multinational Dreyfus)—all Argentine capital—combine soybean production with cereals. The price of the land is one of the key factors. Good Argentine land for soybean cultivation costs approximately US$10,000 per hectare; in Uruguay it ranges from $2,000-5,000. However, back in the year 2000, that same land cost only $400 per hectare. For this reason many producers, eager for high gains, decided to rent their land to the soybean pools.5 Landowners leasing for dairy farming are happy to get $70 a hectare; for soybeans they can charge more than $200. Arable land production yields are between six and seven times that of cattle ranching, due to high international soybean prices. With the advent of the soybean, farming has become pure business, managed by "agricultural managers." These managers see no divide between agriculture and finance. In order to provide themselves cover against any possible risks, they take out insurance and fix prices based on the Chicago Board of Trade futures markets. They diversify their client base and the products sown and their plantations are spread geographically across nations and the region as a whole. This is done to ensure that "the [agricultural] business is no riskier than any other financial activity."6 Soybean occupies around 60% of Uruguay's arable farming land, but this percentage continues to grow every year. The sunflower crop, that once represented around 40% of the land sown, has been reduced to 8.5% in 2007 and maize went from 30% to only 11.6%. In 2001, only 7% of Uruguayan arable land was part of operations of more than 1,000 hectares. By 2006 these huge operations already controlled 15% and produced 57% of the total soybean crop, though they represent only 7% of all producers. Put another way, a concentration of only 54 producers represent more than half of the soybean production. Between 2000 and 2005, 47% of the family producers (each with an average of 216 hectares), quit the business. At the other end of the spectrum, the larger agricultural-cattle industrialists went from an average of 1,878 to 3,309 hectares per producer over the same period. Finally, soybean agriculture is not a major employer due to abundant use of herbicides and the complete mechanization of the process. For example, dairy farming employs about 22 workers every 1,000 hectares, cereal agriculture only 10, but soybean needs just 2-5 workers per 1,000 hectares. Only forestry creates fewer jobs than soybean. A Nation for Sale Although the data is not precise, estimates show that in 2000 about 10% of Uruguayan land was in the hands of foreigners.7 Over the last six years, four million hectares, 25% of Uruguay's arable land, came under foreign control.8 In neighboring Brazil for example, only five million hectares are in the hands of foreigners but Brazil has 50 times more arable land than Uruguay. Half a million hectares are occupied by multinational firms in use for forestry. The Finnish company "Botnia" has 160,000 hectares in forestry operating as "Forestal Oriental"; the Spanish group Ence owns 127,000 hectares in the name of "Eufores"; the American Group Weyerhaeuser9 exploits 150,000 and the Swedish Sora Enso bought 45,000 but will need 120,000 when it installs its plant. All together a half million hectares of pine and eucalyptus are in the hands of large foreign corporations. Brazilian firms bought the largest meat refrigeration systems of Uruguay. The "Marfrig" group bought the plants in Colon; "Tacuarembó" bought those at San Jose, resulting in the 40% Brazilian control of meat production. As for rice, we see the same pattern: in 2007, the "Camin" firm (based in the neighboring Brazilian state of Rio Grande do Sul), bought the largest Uruguayan rice firm. The whole chain of rice production (agriculture, storage, and export) is in the hands of Brazilian firms, and Brazil is the major destination of Uruguayan rice production.10 Now foreign investment is eyeing the dairy industry, with the arrival of large investments from both New Zealand and Brazil. The cattle sector is becoming highly concentrated in the hands of foreign capital: 72% of beef processing is in the hands of just 10 refrigeration plants; 88% of pig production is in four plants; and just two plants process 80% of milk products.11 The situation is so serious that the authorities in the Ministry of Livestock, Agriculture, and Fisheries are nervous to speak of the subject, and have done very little to deal with the issue. The parliament approved a law that obliges land-owning joint-stock companies to lose their anonymity. This was done so that in two years' time the landowners will be named and the Uruguayan state can determine the extent of foreign ownership. But, as happens in Brazil, the true owners can hide behind "Uruguayan partners." Even given this loophole, investors in forests and special pension funds, Uruguayan or foreigners, are not obliged to reveal their land assets. However, they will be obliged to prove that they invest in technology and create employment for Uruguayan nationals. Also envisioned are means to prevent foreign ownership in border areas and implement ceilings on foreign investment. Nevertheless, there are two camps in the Uruguayan government: those who believe all investment is positive and those who maintain that it is the state, and not large multinationals, that is responsible for determining how, and in what areas, the country should grow. Serious problems result from soybean agriculture practices. Seed-sowing practices have changed radically. Traditional farming practices, even for large industrial farms, practiced rotation of crops and cow pastures, for the sake of the land. By means of rotation fertility lost during use is naturally restored by animal waste. Unlike other crops, soybean agribusiness uses continuous agriculture practices. The lack of crop rotation means the land has no opportunity to recover. This in turn leads to increased fertilizer and agro-toxin use (insecticides, etc. ...). Continuous agriculture is possible due to the use of a system of no-till sowing, which replaces conventional deep plowing. Direct seeding sows the seeds without first plowing the earth, which has the benefit of reducing the erosion. However, this practice depends on the massive use of chemical herbicides for weed control. It is however, promoted for economic efficiency to avoid rotation with cattle pastures, thereby intensifying land use. According to experts, by not being worked in a conventional manner, and because leftover soybean green matter decomposes quicker than other crops, for six months, the land is bare. This lack of vegetation results in increased erosion from rainfall. For these and other reasons soybean agriculture is one of the crops that most negatively affects the fertility of the land. The Uruguayan minister responsible for cattle ranching, Ernesto Agazzi, has indicated that: "Farming development must be environmentally, economically, and socially viable." He noted that it is possible that: "The miserable hoarding currently in operation to maximize profits using hyper-intensive agriculture is an unsustainable use of national resources," and said "To create a centimeter of land takes a thousand years and to destroy it, merely a moment." He called on producers to take care of the fertility of the soil "as a public resource."12 New Power Block The countries of MERCOSUR have usurped the position of the United States as highest soybean producing region in the world. Argentina, Brazil, Paraguay, and Uruguay (to which Bolivia should be added, due to its high production levels in the department of Santa Cruz), have reached a level of 105 million metric tons annually of soybean production, compared with 87 million in the United States. This change is part of the process of refocusing the economies of the region on the production of primary commodities for export, implementing modern technological developments in agri-business. Put another way, the region is being placed in its position in an international division of labor, as provider of agricultural commodities as feed for factory fed animals in the northern hemisphere. For that reason, the soybean production area has increased by 120% in Latin America between 1990 and 2005. One of the decisive changes that soybean brought to Uruguay is the change in the way the corporate sector operates. There was a power shift in the chain of production from the growers to the grain buyers, who in turn became the main source of financing.13 To a large extent this explains the role of the large multinationals and the concentration of production, leading to the fact that agriculture has now become a speculative industry. Another relevant change is the degree of industrial processing of the region's soybean crop. Most countries export their soybean crop in the form of raw beans (unprocessed), with the notable exception of Argentina. For example in 2007, Brazil processed only 52%, but Argentina processed 71% of its production into soybean flours and oils. Uruguay lies on the other end of the spectrum: only processing 5%, and exporting 95% as raw soybeans.14 Obviously raw bean exports generate very few jobs. Argentina raised taxes on soybean and sunflower exports to foment grain production, creating subsidies. In some aspects the Argentine national policies favor the creation of jobs, although the Argentine policy lacks any policies for redistribution of wealth. Instead Argentine policy is limited to favoring large production and export groups and for soy flour and oil, with whom the government maintains a solid alliance. It is interesting to note that although the regional governments differ somewhat in their policies, the results are the same, always benefiting the same interests. In Brazilian grain/bean processing, 50% is undertaken by four companies; the first three are U.S.: Bunge, Archer Daniels Midland Group (ADM), and Cargill. In Argentina, just three companies control 50%; of them two are U.S.: Bunge and Cargill, and the third Argentine, Vicentín.15 The industrial production is in the same hands, and highly concentrated, as is commercialization of these products. Back in Uruguay, where, as we noted before, the soybean industry chose not to industrialize, we see that the concentration of the exporting groups is even greater than those of its neighbors. The five main corporations control 77% of the exports. First is ADM, with 21.5% of the soybean exports. In 1996, the Department of Justice of the United States applied the largest antitrust criminal fine in the history of the country, ($100 million dollars) on ADM for their part in the lysine and citric acid cartel. In second place is Cargill, with 18.6%. Next come three Argentine groups: "Agronegocios del Plata" of the Grobo group, controlling 15%; followed of "Peréz Companc16 with 11%; and in fifth place a subsidiary of Dreyfus, Uruagri, with 10.6%. All told: two American multinationals control 40% of the Uruguayan exports of soybean, and three Argentine corporations another 37%. In order to complete the panorama, it should be noted that Uruguay is an importer of flours, oils, and industrial derivatives of the soybean. It also imports all that is required for soybean cultivation, from seeds to agrochemicals such as fertilizer. Put simply, Uruguay exports raw grains and imports their industrial byproducts. These are the new factors of power in Uruguay and in the region. The progressive governments of Luiz Inácio Lula da Silva, Cristina Fernández, and Tabaré Vázquez, support this new power block formed by local elites tied into agri-business and the multinationals in the sector. Commenting on the recent resignation of the Lula administration's environment minister, Marina Silva, the MST (Brazilian Landless Peasants' Movement), indicated that her resignation should be chalked up as a victory for agri-business. "Agri-business is today the largest protagonist of the great destruction of the Amazon Basin," using "the state apparatus for their own private aims." By employing tactics such as large illegal land occupations by owners of large estates, the land is de-forested for wood, and cattle and soybean soon follow. "This process is lead by financial capital and the huge multinationals of agri-business like Cargill, Bunge, Monsanto, Syngenta, Stora Enso, and Aracruz," says the MST. The unholy alliance of Southern Cone governments with agri-business is, as they say in the River Plate region, "bread now, hunger for tomorrow." In the region this saying applies in both senses. In literal terms, as has been repeatedly stated, monocultures are anathema to food sovereignty. Secondly, because the new blocks of power that these governments help to support are now beginning to ask for more than those same governments can give them without losing their popular support. The "lock out" of the Argentine power groups is a small taste of things to come. End Notes El País (España), June 8, 2008. Argentina has measures in place to control and tax certain exports. The export rights ("derechos de exportación") have been in place for a long time; their taxation levels ("retenciones") have risen sharply since the financial crisis of 2002 and are now the reason for unrest in Argentina. "El País agropecuario", ob. Cit. Idem. A pool is a financial "pool" of people or organizations who provide capital to rent land for soybean production; they provide all services and the renter is simply paid a fee per sow-to-harvest period. "Soja transgénica y sus impactos en Uruguay," ob. cit. p. 45. Idem, p. 178. "Los dueños de Uruguay" (Uruguay's owners), ob. cit. http://maps.weyerhaeuser.com/maps/displayT2.asp?sectorID=null&mapID=24&businessID=null&locID= Idem. "Soja transgénica y sus impactos en Uruguay" (Transgenic soybeans and their impact in Uruguay), p. 142. Raúl Zibechi, ob. cit. "Soja transgénica y sus impactos en Uruguay," p. 25. Idem, p. 159. Idem, p. 163. http://es.wikipedia.org/wiki/Gregorio_P%C3%A9rez_Companc. Raúl Zibechi is international analyst for Brecha of Montevideo, Uruguay, lecturer and investigator on social movements at the Multiversidad, and adviser to several social groups. He is a monthly collaborator with the Americas Policy Program (http:///). Raúl Zibechi