CHILE Chiloé Island Wrestles With Free Market Forces
Schurman, Rachel & Sheehan, Beth
Like anyone who makes a living from the sea, Arnoldo Raimilla is no stranger to outside forces. On Chilod island in southern Chile, some 700 miles from Santiago, strong winds and storms often...
...That same year, public investment amounted to $1.5 million...
...The federation has attempted to woo more buyers to the island and to establish purchasing agreements that will insure a stable, fair price for its members...
...And through weekend workshops, radio programs and regional meetings, it is laying the groundwork for the transition from individual to cooperative marketing...
...On Chilod island in southern Chile, some 700 miles from Santiago, strong winds and storms often blow over the horizon without warning...
...It was dollars...
...In order to cultivate pelillo, one must petition for a "concession," or the exclusive right to use a specific area of the beach...
...Many became full-time divers and fishermen, while their sisters left the family farms to work as laborers in new fish-processing plants, canneries and salmon farms, or as maids in the rapidly growing port towns...
...Islanders Unionize Determined to get in on the concession mania before there was nothing left to give out, islanders formed 54 seaweed growers organizations, called sindicatos...
...Food and Drug Administration...
...One day a relative wrote saying things were good here and you could make a lot of money in pelillo...
...Natural Resources Depleted Chile's export boom has taken a serious toll on the island's natural resource base...
...When the loco stock reached a critically low level in 1989, the Pinochet government was forced to give up its anti-regulation posture and impose a three-year ban on loco harvesting...
...They used the island's redwood trees to build their houses, its cypress to construct their small fishing boats, and other hardwoods to fuel their REPORT ON THE AMERICAS u .. 3ti;Srr '` c I YIF 'wood stoves during the long winters...
...After the 1973 coup, as part of its free-market economic program which struck down trade barriers and promoted private business as the motor for economic growth, the military government curtailed credit and technical assistance to small-scale farmers...
...The brown 10 REPORT ON THE AMERICAS aI I 1 onto small boats with long-necked pitchforks...
...Following the recommendations of its Chicago-trained economic advisers, the Pinochet government devalued the peso (making Chilean goods cheaper abroad), streamlined the export process, and provided institutional support to would-be exporters...
...Dozens of entrepreneurs, mainly from Santiago, set up processing plants in whatever building they could find...
...As Chile's international trade picked up, however, some clever soul recognized the seaweed as the very same stuff used to make agar-agar, a common food preservative...
...Between 1976 and 1985, the seafood extracted in and around Chilo- more than tripled from 36,000 to almost 129,000 tons...
...Fortunately, as natural pelillo banks began to diminish, researchers at Chile's Fisheries Development Institute (IFOP) found a way to grow it...
...Islanders farmed potatoes, raised sheep and cows, and fished...
...Chilote farms were simply too small and their production methods too antiquated to survive in the increasingly competitive environment...
...Newcomers worked alongside island farmers who cultivated potatoes in the tradition of their forebears...
...Seaweed-grower Arnoldo Raimilla now spends a good part of the week away from home, looking for work in the port town or on a fishing boat heading south in search of shellfish...
...Known for their savory meat, locos are well worth the time it takes to prepare them: first they must be beaten with a wooden stick to make them tender, and then boiled for a couple of hours...
...Pelillo is now cultivated in a variety of ways, depending on location and a grower's financial resources...
...Outsiders and some Chilotes snapped up the best concessions before the rest of the population knew what hit them...
...But now, new market-made hazards are buffeting Raimilla and the subsistence-level seaweed harvesters he represents...
...According to Chile's National Fishing Service, the number of processing plants grew from two in 1976 to 21 a decade later, and to 38 by 1989...
...Until recently, this beloved and famous plate was affordable to all but the poorest Chileans...
...It takes root in the sandy ocean floor, and with the right amount of sunlight and nitrogen, grows as fast as field grass...
...Anyone who could don a wetsuit went diving...
...But in Chilo's subsistence economy, where money and its management were never an important part of daily life, few Chilotes invested their new income...
...Because the government did not compel businesses to reinvest any of their income, nor tax them for their resource use, little of the fish industry's profit stayed in Chilod...
...According to a study done by Agraria, a national research institute, the value of natural resources extracted from the island equaled $27 million in 1987...
...Before 1980, islanders claim, it was impossible to wade into the water without stepping on these large, grayish shellfish...
...The case of Chilean abalone-"locos" in the local vernacular-provides a telling example of what happened when Chilo6's marine resources suddenly took on commercial value...
...Diving for shellfish, particularly abalone, became so profitable that a good diver could earn $1,500 in two months-a year's salary for an island teacher...
...While he and many others have learned that the benefits of international trade can be great, the risks may be bigger than they can afford to take...
...The rising cost of fertilizer and credit drove islanders to produce less and sink deeper into debt...
...But now," he says, raising his voice over the near-deafening noise of the torrential rains so common in Chiloy, "the only thing we can live by is seaweed...
...Before long most nearby loco banks were wiped out...
...Instead, it supported medium and large-scale agribusiness which exported products such as grapes and berries to the United States and Europe...
...But the economic strategy that brought shortterm prosperity has had social and environmental consequences that threaten to make islanders more vulnerable in the long run...
...Consistent with the laissez-faire principles of its economic model, the government granted concessions on a firstcome, first-serve basis, with no special consideration given to the people whose land abuts the shore...
...the minga is a traditional form of collective work...
...Overnight, the islanders awoke to find themselves competing with national investors and foreign consumers for the rights to the island's natural bounty...
...In those days, Chilod's pristine bays, abundant marine life and expansive hardwood forests did not attract attention from outsiders...
...Within a few years, the principal natural beds were stripped bare...
...In the late 1970s, Mack trucks began arriving from Santiago daily to load up with fresh fish, shellfish, and seaweed to supply new export markets...
...Turning his back to the mountains, Raimilla surveys the inlet where tall, sturdy poles rising from the shallow waters mark off the freshly harvested seaweed fields...
...The federation is also taking up the battle over resource access...
...In 1978, boats from the north began arriving by the fleet...
...Some firms became so desperate they hired $500-a-day helicopters to fly in and buy locos from divers in remote areas...
...We came to Chiloi in 1986," says Maria Angelica, "because my father couldn't find work in Santiago...
...Raimilla was part of the great tide of islanders and outsiders who rushed to supply a new demand for ChiloC's seaweed and shellfish...
...That was four years ago...
...The divers and fishermen weren't alone in failing to invest in the island's development...
...And it is setting up a fund so that sindicatos can keep their seaweed off the market when prices are low...
...They are probably better off in material terms than before the recent export boom...
...The organization of the future will be the cooperative," wrote new Federation President Juan Aedo...
...Everything else they've taken out: natural resources and the tax rebate for employing Chilotes...
...The 150-mile road, started 30 years ago, that runs the length of the island is still not completely paved...
...Rachel Schurman is a doctoral student at the University of Wisconsin...
...Most larger growers have fully equipped diving teams that plant and harvest their seaweed crop underwater...
...The high price of fertilizer and the depletion of marine resources are part and parcel of the economic model that has generated rapid growth (over 5% a year) in Chile since 1984, faster than any other country in Latin America...
...If this substitute turns out to be cheaper than cultivated seaweed, Chilo6 growers may find they have lost their market permanently...
...The unleashing of market forces also turned the island's marine wealth into valuable commodities...
...They came for the brown gold, pulled everything up from the roots, and now we are left with nothing," complained the president of one of Chilod's new seaweed growers organizations...
...Rather than continuing the tradition of subsistence agriculture or migrating off the island to look for work, the sons of Chilote farmers turned toward the sea...
...The only thing that the fishing industry has brought to Chilod is demand for unskilled labor," a rural development expert commented wryly...
...Arnoldo Raimilla and his fellow "Chilotes" have experienced more rapid and radical changes in the past six years than their ancestors did over the preceding four hundred...
...So we packed up and came...
...In 1987, 19 of the unions founded the Provincial Federation of Seaweed Cultivators and Collectors...
...The pattern repeated itself with the seaweed, pelillo (gracilaria...
...Potatoes aren't worth growing for the market because of the high cost of fertilizer, and everyday we have to go farther to find shellfish and fish...
...Last May, the federation voted unanimously to establish a marketing cooperative to sell their seaweed...
...Member unions gather once a month in the main port town of Ancud to discuss federation matters, except during the harvest when they meet at the beach and compete for buyers...
...Between the early 1970s and mid- 1980s, the numberof acres planted with potatoes in Chilo6 fell more than 50 percent...
...More controversially, the federation is asking for the reallocation of areas already concessioned but not in use...
...Right now, prospects for the federation and its member unions look decidedly dim...
...It's too soon to tell whether or not these organizational initiatives will allow Chilotes to defend themselves against the new economic forces that international market integration has brought...
...From 1980 to 1985, the extraction of pelillo tripled, as islanders and migrants began spending more time waistdeep in the ice-cold water gathering the plant...
...The outcome of this vote represents the most sustained expression of solidarity in Chilod, continuing the cooperative tradition of the Huilliche minga...
...To provide the family with cash income, a husband or son would often work on a sheep ranch in Patagonia, leaving the women to run the farm as well as the household...
...It wasn't abalone I saw when I dove turned to gold, and in a modern reincarnation of the California gold rush, national investors, foreign companies, and under- and unemployed Chileans flocked to this once-isolated island...
...Out of their small second-floor office equipped with an old manual type-writer, two desks, a phone and a kerosene heater, the federation is waging a cooperative education campaign to ensure full membership participation...
...Wearing a homespun woolen sweater to protect him from the cold and black rubber boots to keep his feet dry, Raimilla walks from his house along the peninsula that divides the estuary from the open sea...
...Making the future appear even more unstable, a new synthetic substitute for agar-agar, developed by the San Diego-based Kelco division of the Merck company, has received limited approval from the U.S...
...Because of its low capital require- ments, pelillo cultivation is an impor- tant economic alternative for islanders and migrants alike...
...Most families don't have running water or electricity, and a high-school education for their children remains a luxury...
...The Huilliche is one of the indigenous populations that lived on the island for centuries...
...Fishermen supplying the processing plants also began to earn a good, steady income for the first time in years...
...Beth Sheehan worked with the federation of seaweed-growers unions in 1991...
...In a local radio interview during Chile's "Month of the Sea," Aedo discussed the importance of giving Chilote communities priority in the future allocation of concessions...
...It is training union members to analyze their costs, evaluate their production and monitor market prices...
...This long stringy brown plant grows in protected coves, bays and backwaters upand down the coast of Chile...
...Much of their earnings went to liquor, prostitutes, and name-brand blue jeans and sneakers...
...Wild pelillo used to be so abundant in Chilo6 that islanders used it to fertilize their potato fields...
...Six years ago, he came back to try to make a living on the 3,088-square mile island where he was born and where 120,000 people eke out a living from the sea and the poor earth...
...But the shift to cultivation created its own set of problems, most significantly the tensions that have arisen from the establishment and allocation of water rights...
...And the smallest and poor- est growers, including most islanders, plant and harvest each row by hand, awaiting the full moon and low tides when they can wade out into the shal- low water...
...Although the Chilotes had never produced much for the market, they felt the impact of Pinochet's policies...
...Spurred on by these and other measures, Chilean entrepreneurs began exporting what their country had to offer: fruit, fish, wood and minerals for markets as faraway as Japan, Taiwan and Spain...
...Another popular item was color T.V.s-and the car batteries needed to run them...
...Now in his mid-forties, he points toward the snowcapped Andes across the water, where as a young man he worked on a sheep ranch in Argentina for a few years...
...Arnoldo Raimilla and 25 families organized one called Los Arrayanes (the name of a common local tree...
...After a dramatic fall in seaweed prices last May when the largest buyer in Chilo6, Algas Marinas, declared a moratorium on purchases, some unions opted to sit on hundreds of pounds of wet seaweed they had harvested rather than sell at half of last year's price...
...When the Japanese discovered that the loco could substitute for its increasingly scarce abalone-and were willing to pay Japanese prices for it-they set off a reaction that no one ever imagined...
...Medium-sized growers generally harvest their seaweed by raking it for locos," one Chilote recalled nostalgically...
...Winds of Change For centuries, Chilotes lived on tiny farms (minifundios), generally too small to support an entire family...
...What they will leave when they go will be a few tin warehouses which aren't even good enough to use as schools...
Vol. 25 • February 1992 • No. 4
