Agribusiness booms as Bolivia burns

Bolivian environment 001, acrylic on canvas, August 2019 © Sheep María.

Opinion • Stasiek Czaplicki Cabezas • November 15, 2024 • Leer en castellano

Thus far this year, fires have devastated more than 10 million hectares of forest and non-forest ecosystems in Bolivia. This record-breaking level of destruction—and records have broken every year since 2019—means that an area roughly 66 times the size of Mexico City went up in flames.

Fires have burned more than 10.6 percent of Bolivia's forests. This destroyed flora, fauna, disrupted essential water and climate functions and put the knowledge and the livelihoods of the communities that inhabit them at risk.

Fires have directly impacted nearly 350,000 people this year. Most live in rural areas, and they are predominantly from Indigenous and agricultural communities. They have long suffered deteriorating living conditions, a rural exodus and attempts at dispossession. Fires have fortunately tapered out in recent weeks with the arrival of rain.

Given the magnitude of this catastrophe, the quantity of government funds allocated to humanitarian assistance reveals authorities’ negligence and insensitivity: the government earmarked only 5,027,324 Bolivianos (US $731,779 at the official rate or $474,276 on the parallel market) to cover the most urgent needs. That’s about two dollars for each person affected.

Eighteen years after the Movement Towards Socialism came to power, a critical assessment of the country's ecological crisis is urgently needed, especially one that takes the uncontrolled destruction of forest and non-forest ecosystems into account. Doing so requires leaving behind romantic ideas, and making visible the challenges and contradictions of an economic model that, far from protecting nature and benefiting rural communities, has intensified exploitation and dispossession.

Bonanza, collapse and speculation

To understand the current situation, we must return to the first half of the 2010s, when Bolivia was at the tail end of its last extractivist bonanza. By 2020, Bolivian exports (mainly hydrocarbons, minerals and soybeans) fell by approximately one-third from the highs reached in 2013 and 2014. Gold and soybean exports have boomed since then, boosted by record international prices, but this has not offset losses in fuel exports, which continue to decline.

This took place as the middle class grew, leading to an increase in imports, which generated a trade deficit starting in 2015 that only began to reverse with a small surplus in 2020. These dynamics, together with other macroeconomic policies, led to an alarming reduction in the Bolivian government’s dollar reserves, which pushed up the price of imports and prompted a crisis in the supply of imported hydrocarbons.

It was in this context that Evo Morales’s government decided in 2013 that diversifying the economy would be the principal objective of Agenda 2025, which has provided the macroeconomic framework since then. Agricultural expansion was a pillar of this transformation, with the explicit goal of tripling the number of cattle. This required the conversion of millions of hectares of forested and non-forested ecosystems into livestock range. Vice President Álvaro García Linera later proposed increasing the area under cultivation by one million hectares annually, which would triple existing agricultural zones by 2025.

These policies connect to fire: burning is a crucial technique for expanding agricultural zones. That’s why the government adopted a set of norms known in Bolivia as the incendiary laws, which eliminate restrictions for illegal clearing and fires, from 2013 to 2019. These laws are essential to achieving the government’s goals. For example, regulations established fines for illegal burning of up to $2 per hectare; the fine for illegal clearing has remained at only $0.20 per hectare since 1996.

Investments by pension funds and generous government subsidies have enriched the agribusiness and livestock sector to the tune of $1.5 billion. The outcome is not surprising: agribusiness soared from 208,805 hectares in 2015 to 1,203,206 hectares in 2023.

The expansion of agribusiness and ranching in Bolivia, and its profound socio-environmental impacts, are the result of policies designed to encourage the sector’s growth. The fires are the most visible consequence of the influence of powerful interests that threaten forests and their lands and, in a context of worsening climate change, destroy increasingly fragile ecosystems.

Agribusiness and the forest in flames

Cattle ranching is the main driver of the expansion of the agricultural land (57 percent), followed by agribusiness, mainly soybean crops (17 percent). Business interests dominate land clearing. Estimates indicate that around 1.5 million hectares of forest (and a similar amount of other ecosystems) disappeared between 2019 and 2023. This level of destruction is unprecedented.

Research on the deforested lands shows that large companies own around 60 percent of deforested areas in the main agricultural zones. Small producers and Indigenous communities—the traditional residents of these areas—barely participate and are often displaced or put out of business by agroindustrial growth.

In the midst of this expansion, the Bolivian soybean sector faces a crisis without parallel. Soybean exports have fallen by 40 percent since 2023, a drop caused by plummeting international prices and production declines prompted by drought related to climate change and the loss of ecosystems.

This has slowed the flow of foreign exchange into the country and exposed the fragility of an agro-export model that depends on a single crop. In this context, the expansion of cattle ranging—driven by Chinese demand and export quotas that are continually pushed upward—has become more and more important.

In the first eight months of 2024, meat exports reached approximately $160 million, suggesting that Bolivia is on track for a record year. This growth occurs in the context of a renewed alliance between the agribusiness sector and the federal government, as demonstrated by a 10-point agreement signed in February 2024 that aims to alleviate foreign currency shortages. In the midst of the tragic fires that blazed across the country earlier this year, the government launched a new series of initiatives designed to support agribusiness, mainly by lowering its costs.

While reducing barriers for agribusiness, the government has not taken meaningful steps to curb illegal burning and deforestation, which continue to increase in an uncontrolled manner and generate high environmental and social costs. In addition to agribusiness, commercial and financial land speculation is also a significant cause of deforestation.

In many parts of the country, deforestation is the first link in a speculative chain. Cleared land is more valuable than uncleared land and often becomes a financial asset, which speculators resell or use as collateral to access bank loans and various murky financial mechanisms. This speculative land business benefits a small group of corporate actors, while generating negative socio-environmental impacts and displacing local communities.

Bolivia is at a crossroads. The current trajectory, which prioritizes the expansion of agribusiness, will deepen the country's dependence on an ecocidal development model that relies on agricultural exports. While it can generate income in the short term—especially for the companies that dominate the sector—it has serious social and ecological consequences.

The continued loss of biodiversity, the displacement of communities and increased climate vulnerability cannot be ignored. So far, however, none of the political factions in Bolivia appear willing to set a new course of action. The lack of an alternative vision suggests that the country will continue to rely on an extractive model that exacerbates ecological crises and deepens inequalities.