Foreign Relations of the United States, 1958–1960, Volume V, Microfiche Supplement, American Republics

CO–25. Memorandum from the Director of the International Cooperation Administration (Riddleberger) and the Assistant Secretary of State for Inter-American Affairs (Rubottom) to the Under Secretary of State (Dillon)¹

Washington, March 25, 1960

SUBJECT

• Proposed Program for Assistance to Colombia’s Agrarian Reform Program

Problem:

When Colombian President Lleras Camargo makes his official visit to Washington, April 5–8,² he is expected to inform us of his strong interest in obtaining U.S. Government assistance for Colombia’s land reform program. We believe we should respond very sympathetically looking toward the possibility of subsequently extending a loan or loans to assist Colombia in its land reform program—more specifically in programs of land development and settlement.

Discussion:

1. In Colombia, as in other under-developed Latin American countries, the basic economic problem in which progress is essential to the achievement of U.S. objectives is two-fold: (a) How to increase the national income; (b) how to achieve its more equitable distribution.

2. The bulk of our economic aid—grants, loans, technical assistance—is devoted primarily to problem (a), to increasing the national income. However, a greater peril to our objectives may lie in problem (b),—in the potential popular reaction against the inequitable distribution of income and in the popular identification of the United States with the wealthy. No matter how much progress governmental and private capital may make in raising the national income, that very progress and our basic objectives will remain in grave danger if gross disparities persist in income distribution. While continuing our efforts to promote economic growth, we need to devise ways through which our aid may be more effective in achieving progress toward a more equitable distribution of income and in identifying the United States with legitimate popular economic aspirations.

3. Need for Program:

a. Colombia’s urgent need. On one hand, Colombia has much arable land not in economic use—governmental lands that are under-developed and generally difficult of access, and private lands that are under very light use or completely in disuse. On the other hand, Colombia has hundreds of thousands of small farmers working tiny infertile plots or dispossessed from their lands by guerilla violence and idle in huge festering urban shanty-towns. Our Embassy reports, and we agree, that the “fundamental question facing Colombia and, therefore, the Lleras Administration is whether social and economic betterment for the large underprivileged majority of the Colombian population can be achieved sufficiently rapidly in an evolutionary manner to avoid an attempt to achieve the same ends by revolutionary means,” and “. . . a major front . . . is . . . land reform.” Colombia needs agrarian reform both politically, to decrease the risk of insurrection, and economically, to increase agricultural production.

b. President Lleras wants assistance. President Lleras has told our Embassy: a) The question of providing land to the millions of poverty-stricken peasants in Colombia was a crucial and urgent one; b) the danger of Communist exploitation of this situation was great and imminent; c) the Colombian Government’s financial sources for mounting such a program were very limited; d) U.S. assistance in an agrarian reform program in Latin America would make a tremendous impact throughout the continent, and the United States should pick some country for an example (ensayo); e) such assistance would insure the moderate evolution of agrarian reform and avoid the extremist solution from exploding as in Cuba.

c. Evolutionary progress in agrarian reform is urgently required in U.S. interests. Castro agents and Cuban Communists are working with their Colombian fellows among the peasants, selling the Cuban type agrarian reform which, in effect, invites land “reform” by violent takeover. Their activities could precipitate insurrection that would lead to unsound Colombian land reform and to a political defeat for the United States. USOM/Bogotá reports Communism is “capitalizing on the fact that many peasants have nowhere to go while large tracts of land are held by city people for purely speculative purposes.” President Lleras has about 2-1/2 years left in office in which to demonstrate his moderate government’s intentions and ability effectively to tackle Colombia’s basic problems. It is essential that we effectively help him to deny to the Communists the monopoly of hope.

d. Support for agrarian reform is in accord with U.S. policy. Speaking to the Tenth Session of the FAO Conference in Rome in November 1959,³ Mr. Horace Henderson, Deputy Assistant Secretary of State for International Organization Affairs, reaffirmed our recommendation “that same land reform or agrarian reform is in some countries essential to economic and social development. We reaffirm our support for the concepts of land reform as embodied in resolutions of the General Assembly of the UN, the Economic and Social Council and the FAO Conference.” With regard to Congressional opinion, two Senators who recently visited Latin America have reported as follows: “. . . we should be entirely sympathetic when a South American Government which has formulated a just and equitable land reform program needs capital to provide compensation for the land” (Senator Morse); “. . . the United States should adopt a more realistic lending policy . . . in regard to loans for social reform or welfare projects, as . . . land redistribution” (Senator Aiken).

e. Colombia already is attempting a sound approach to agrarian reform. President Lleras Camargo, internationally respected leader of Colombia’s governing alliance between liberals and conservatives, both of which are economically conservative and regarded in Colombia as “the oligarchy,” is pushing land reform efforts on several fronts. By tax inducement he is attempting to stimulate the greater utilization of private lands. By legal provisions making available some deposits of commercial banks and savings funds for agricultural credit, he is attempting to increase production under existing ownership. Through the Caja de Credito Agrario (Agrarian Credit Institute), he is attempting a program of resettling landless peasants on governmental lands. Through the application of a seldom-used law of 1936 providing for the expropriation of private lands that are not being and have not been used for over ten years, the Caja has expropriated (with compensation) some few private holdings. ICA has been assisting the Caja with technical assistance and PL 480 funds. However, the efforts so far have only begun to scratch the surface of the problem and there is considerable need for additional assistance.

4. Proposal for U.S. Aid

Meaningful agrarian reform involves much more than providing the landless with land. Almost invariably it involves agricultural credit, and it may involve the development of adequate land classification, land title procedures, rural facilities such as roads and schools, and even markets. Last but not least, it requires an unusual degree of governmental administrative capacity. Thus, it is first necessary to work out detailed plans for agrarian reform. Perhaps a high priority project would be the preparation of farm sites and the settlement of landless peasants on selected areas, including the construction of roads and the provision of credits to facilitate crop cultivation. At this time Colombia needs assistance in the preparation of such plans and it is proposed that the U.S. Government offer to provide through increased technical assistance about $100,000 to help undertake the studies and develop the plans needed. It should be recognized that such studies will probably result in requests for financial aid to assist in implementing projects which might be proposed. The U.S. Government should indicate to President Lleras Camargo that a sound projects so proposed could be considered for financial assistance either by U.S. Government financing agencies or by international institutions provided such projects met appropriate criteria of these agencies or institutions. The President should also be informed that external aid can only supplement internal efforts in a small way in successful programs of agrarian reform. The bulk of the resources required must be provided from internal sources, in order not to burden unduly the debt-carrying capacity of the country to the prejudice of other forms of economic development which will require the import of Equipment.

Recommendation:

That President Lleras, when he comes here, be informed that the United States, (1) is keenly aware of the urgency of Colombia’s need for improving the lot of Colombia’s rural population, (2) views with great sympathy and interest the efforts he is making in that direction, (3) would be prepared to consider a request to participate with the Government of Colombia in carrying out studies which might develop specific and constructive projects to that end, (4) would be prepared subsequently to have sound projects considered for financial assistance either by U.S. Government financing agencies or by international institutions, provided such projects met appropriate criteria of these agencies or institutions, (5) to the extent that the national currency of Colombia might be accumulated through PL 480 programs or in other ways, the United States would be prepared to consider requests from Colombia that this national currency be used in connection with the agrarian reform program. Where the requirement is for foreign currency, loan requests would be considered on their merits.⁴

Approved: __________⁵

Disapproved: __________

1. Source: Department of State, Central Files, 821.16/3–2560. Confidential. Drafted by Wymberley D. Coerr of the Office of West Coast Affairs on March 23; revised by William V. Turnage, Special Assistant to the Assistant Secretary of State for Economic Affairs, and Dennis A. Fitzgerald, Deputy Director for Operations, International Cooperation Administration. The memorandum was concurred in by Turnage, John O. Bell, Special Assistant for Mutual Security Coordination, and Charles R. Harley, Chief of the Latin American Division, Office of International Finance, Treasury Department.
2. See the Editorial Note, Document CO–27.
3. The referenced session of the Food and Agriculture Organization of The United Nations met in Rome, October 31–November 29, 1959. For the text of Deputy Assistant Secretary Henderson’s statement, see the Department of State Bulletin, December 14, 1959, pp. 887–889.
4. A position paper concerning President Lleras’ interest in obtaining assistance for Colombia’s agrarian reform program, drafted by Coerr, is filed under 821.16/3–2560.
5. Dillon initialed his approval on March 26, 1960.