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Market networks and marketing behaviour : the organization of trade in southern Veracruz, Mexico Scarnell, Aida Rosalind 1980

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MARKET NETWORKS AND MARKETING BEHAVIOUR: THE ORGANIZATION OP TRADE IN SOUTHERN VERACRUZ, MEXICO by IDA ROSALIND SCARNELL B.A. The University of Durham, 1973 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS i n THE FACULTY OF GRADUATE STUDIES (Department of Geography) We accept this thesis as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA October I98O ® Aida Rosalind Scamell In presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of Br i t ish Columbia, I agree that the Library shall make i t freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the Head of my Department or by his representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. Department of Cizoc(taTM\j The University of Br i t ish Columbia 2075 Wesbrook Place Vancouver, Canada V6T 1W5 Date (DcMnb^/ i<fgo i i ABSTRACT This thesis arises out of a concern for the continuing disparity i n the levels of development between the Western World, or developed countries and the Third World or less developed countries. Among the most disadvantaged axe the rural populations who constitute a high proportion of the population of Third World countries. In spite of the fact that the peasant sector i s being increasingly drawn into the national economy tnrough the market system, there appears to be no concomitant rise i n the standard of l i v i n g and rural poverty persists i n much of the Third World. The extent to which peasant farmers gain or lose through market participation depends largely on the form and structure of the market system, that i s on the form taken by the network of trade flows and exchange centres and on the nature of relations between buyers and sellers. The primary objective of this thesis i s to describe and analyze the historical development of the market system for the distribution of foodstaples produced by the peasant sector i n southern Veracruz, Mexico since the turn of the century. It i s argued that a dendritic-type market system, i n which vertical flows predominate over horizontal exchange, developed i n response to the demand for foodstaples from the urban industrial centres of Mexico. The lack of a well developed transportation network and the general inaccessibility of the region allowed a i i i small group of merchants to dominate and control trade during the early half of the century. Hecent improvements i n transportation and communication have f a c i l i t a t e d the penetration of the area by outside buyers, causing a change i n the spatial and structural organization of trade. The spatial distribution of the rural population, the system of production and changes i n land use are also factors that have been instrumental i n the particular formation of the market system. Pieldwork for this thesis was conducted during 1975 i n six municipalities i n southern Veracruz using inductive methods. Most of the data were derived from interviews with peasant farmers and traders, or middlemen, based within the f i e l d area, and substantiated further through participant observation, interviews with various public o f f i c i a l s , politicians and prominent members of the conmiunity, and through bibliographic research. In evaluating the impact of changes i n the market system on the local economy, i t would appear that the marketing opportunities for peasant producers have improved only marginally. Peasants continue to s e l l their produce to middlemen at prices below that of the guaranteed minimum price set by the government. Truckers entering the region from major urban centres are reluctant to engage i n numerous transactions with small scale producers, and prefer to deal with local middlemen. i v TABLE OF CONTENTS Page ABSTRACT i i LIST OF TABLES v i i i LIST OF FIGURES . . . ix ACKNOWLEDGEMENTS x CHAPTER ONE INTRODUCTION . 1 Theories of development 1 The role of the market system i n rural development i n the Third World 1+ Development and marketing i n southern Veracruz . . 10 Factors affecting the development of the market system: External demand 13 Transportation 15 Local production 16 Organization of chapters 17 CHAPTER TWO SOUTHERN VERACRUZ: PHYSIOGRAPHIC FEATURES AND LAND USE PATTERNS 22 Location and boundaries of f i e l d area 23 Physiographic features: Northern zone 26 Central zone . 28 Southern zone 30 The impact of agrarian reform 32 The expansion of rural settlement 37 Recent changes i n land use 38 V CHAPTER THREE CHANGES IN THE MARKET NETWORK: IMPACT OP TRANSPORT DEVELOPMENTS ON TRADING PATTERNS U6 The era of riverine transportation 5*0 The coming of the railroad and the Revolution . . . . 5"2 The formation of the dendritic network: 1920 - 1950 $k Northern zone 58 Central zone 61 Southern zone 62 Network changes from 1950 - I960 6k Completion of the coastal highway 6I4. Colonization of the southern 'frontier* 68 Network changes from i960 - 1970 70 The contemporary market system: Post 1970 73 Central zone 7U Southern zone 76 Northern zone 78 Summary 79 CHAPTER FOUR THE ADAPTIVE MIDDLEMAN: CHANGES IN LOCAL MARKETING BEHAVIOUR 81+ Traders operating before 1950: Northern zone 88 (1) Alfredo Pretelin: former acaparador, San Andres Tuxtla 90 (2) John I l e r : former intermediary buyer Coyame 92 (3) Antonio Martinez: former intermediary buyer, Catemaco 93 Contemporary traders: Northern zone 96 (k) Julio Garcia: mayorista (wholesaler) Catemaco 98 (5) Daniel Hernandez: village buyer, Zapoapan 99 v i (6) Francisco Charmin: monopolistic minorista, Sontecomapan 101 (7) C i r i l o Cinta: peasant middleman, Sontecomapan 103 Contemporary traders: Southern zone - . 106 (8) Antonio Alvarez: regional comerciante Playa Vicente 107 (9) Estehan Borrameo: part-time trader, Playa Vicente 110 (10) Ahundio Osorios: multifunctional middleman, Abasolo del Valle 112 Summary 115 CHAPTER FIVE SUMMARY AND CONCLUSIONS 122 The development of the market system i n southern Veracruz: 1900 - 75 1 2 3 The impact of changes i n the market system on peasant producers 130 Prices received by peasant farmers 132 Why do farmers s e l l below the guaranteed minimum? 13^ The role of the market system i n development 11*1 Development or underdevelopment l U l 'The persistence of small scale intermediaries . . . 11+2 Directions for further research 114+ The role of the middleman i n development Il4.l1 Improved marketing opportunities for peasant farmers II4.6 SELECTED BIBLIOGRAPHY A. General references 150 B. Government publications 156 C. Unpublished materials 156 APPENDIX 1: FIELD METHODS 158 APPENDIX 2: RURAL COMMUNITIES VISITED DURING FIELD WORK . 166 APPENDIX 3: LIST OF TRADERS INTERVIEWED I 6 7 v i i APPENDIX hi AVERAGE SIZE OP EJIDAL PLOTS IN TUXTLA REGION 168 APPENDIX $: SURVEY OP MARKET OUTLETS POR VERACRUZ FARMERS 170 v i i i LIST OF TABLES Page I Increases in the area under cultivation in the municipio of Rodriguez Clara . . . . 75 I l ( i ) Characteristics of traders dealing in foodstaples 89 II(ii) Characteristics of traders dealing in foodstaples 97 III Market prices for foodstaples, San Andres Tuxtla 132 IV Average prices received for corn by farmers - pesos (per kilo) I33 V Marketing practices of farmers in 18 municipios in Veracruz, 1966-7 r137 ix LIST OF FIGURES Figure Page 1. Rural Market Systems (a)- Interlocking type (b) Dendritic 6 2. Location and boundaries of f i e l d area (a) Veracruz State (b) Municipalities comprising f i e l d area 25 3. (a) Physical features of f i e l d area (b) Land-form regions 27 1+. Pattern of rural settlement (a) Pre-reform (b) Present day . 31 5. (a} Generalized pattern of land use, Circa 1962 (b) Predominant land use 1975 i+0 6. Main transportation routes through southern Veracruz and adjacent states i n southern Mexico . 1+7 7. F i e l d area: Transportation network and principal centres of population and production 1+9 8 . Development of market network (a) 1920-50 (b) 1950-60 56 9. Change i n the hierarchial organization of the v i market system indicating the pattern created by the movement of foodstaples towards urban markets 65 10. Development of market network (a) 1960-70 (b) Post 1970 72 11. Base location of traders dealing i n foodstaples from within f i e l d area 87 12. Average prices received for com by local peasants during the winter harvest 197U-75 • . . 135 X ACKNOWLEDGEMENTS I would like to thank the various members of the Geography Department who advised me during the writing of this thesis: Alfred Siemens for introducing me to southern "Veracruz, Robert Smith and Terry McGee for their advice, encouragement and constructive criticism and Margaret North for her genuine concern, moral support and sound common sense. My deepest appreciation goes towards those people i n Mexico who extended both hospitality and friendship while I was doing the fieldwork for this thesis, and who helped to make my stay i n their country a ri c h and rewarding experience. Lack of space prevents me from naming a l l those to whom I am indebted, but I would like to offer special thanks to the following: The Naranjo Delfin family of V i l l a I s l a with whom I lived for part of the time, and who included me as a member of their family, Don Vicente Hernandez Baez, and his wife Dona Ampara, of Abasolo del Valle for their openness and generosity, Julio Carranza of La Perla del Golfo and Carlos Perez of V i l l a I s l a for their interest and assistance i n fieldwork, Ing. Trevino of the Banco de Credito Rurale for his time and considera-tion, and for his permitting me to travel with his agricultural inspectors, which enabled me to reach many communities that would have otherwise remained inaccessible. x i Finally, I would like to express my gratitude to the many peasant families who received me with a warmth and hospitality that I have yet to encounter elsewhere. 1 CHAPTER ONE INTRODUCTION The basic issue behind the concept of the Third World s t i l l remains: a moral concern with unequal development within the world system, which leaves most of the world 1s people with minimal provision for their basic needs - inadequate food, shelter, health, work, and education - while a small proportion of the world's population have much more than they need. Geographers and other social scientists have long been concerned with the inequities i n the spatial distribution of income, the general standard of l i v i n g and rate of development on a global and regional scale. Of particular concern i s the plight of the rural 4 population who constitute the majority i n most Third World countries.' The lack of development and continuing low standard of l i v i n g among the peasant sector often stands i n sharp contrast to the growth i n the urban - industrial sector of the nation. This thesis examines the role of the rural market system i n Veracruz, Mexico i n articulating the peasant sector with the broader national economy, and the manner i n which the organization of trade constrains the development of the former. Theories of development A variety of theories have been proposed by social scientists to explain the unequal level of development between and within nations, and to offer solutions to the problem. Until the 1950's, development was considered to be a unilinear process, and individual economies were placed at some point on a development continuum and class i f i e d according to the 'stage' of progress that had been reached. The apparent dichotomy between the 'modern', developed, industrial sector and the 'traditional 1, undeveloped rural sector that characterises the majority of Third World countries was thought to result from the inherent 'dualism', or "the co-existence within one national economy of two economic systems different i n behaviour, 3 organization and performance". I t was believed that the trans-formation of the 'traditional' or 'backward' sector could be achieved through the diffusion of capital, resources and technologi-cal information from the 'modern' sector, and by the strengthening of communications and of commercial and institutional linkages between the sectors. Agrarian development policies for the Third World emphasized the provision of the necessary inputs to raise the level of productivity. Among the most c r i t i c a l factors were l i s t e d : "tenure security, a v a i l a b i l i t y of new yield-increasing inputs, access to markets, farmer's know-how and awareness of opportunities." Furthermore, the establishment of transportation and communication linkages between the modem and traditional sectors, or between rural and urban areas, were held to be v i t a l i n stimulating rural development: "...improved and extended transport f a c i l i t i e s are 3 necessary to the widening and fusion of market areas already settled, and i n stimulating further production for internal or external trade i n a country and so encouraging the growth of a modern exchange economy". These earlier notions of dualism have been gradually replaced by the h o l i s t i c theory that argues that we are dealing with a single, world economic system, the origins of which can be traced back to early European mercantilism, i n which individual economies function as interdependent elements. (Wallerstein, 197U). As stated by McGee (1978)' "The question of relationship between Western World and Third World can be viewed i n broad his t o r i c a l terms as a process of incorporation of Third World countries into an international world system".^ The world economic system can be depicted i n spatial terms as consisting of a well developed 'core' of capitalist, industrialized nations, and a less developed 'periphery' of poor, non-industrial countries. Historically, the growth and expansion of the capitalist core has occurred through i t s dominant relationship with the periphery i n the form of colonialism and imperialism, through which i t was able to obtain the resources with which to develop an industrial base. The centripetal transfer of wealth and resources has inhibited the independent development of peripheral countries, and i t i s argued, has resulted i n the 7 •underdevelopment' of their economies. h Within Third World countries there i s a marked disparity i n the level of development between the modern and traditional sectors and i n the distribution of income within society. However, this disparity i n development does not stem from the lack of integration of the •traditional' sector: Eecent work by anthropologists on peasant societies has dispelled the myth that peasants occupy a marginal position on the fringes of the national economy. On the contrary, the growth and expansion of the industrial sector has resulted i n the penetration and incorporation of rural areas through the expansion of the market network: "... the most important driving force (of incorporation) i s the market complex seeking out even marginal sellers of raw materials and cheap labour, as well as buyers for factory made goods and for services, ... i t implies direct attachment of local production, exchange and 8 consumption to the national market system". The role of the market system i n rural development i n the Third World Pew peasants i n the modem world are untouched by a market, by a pricing mechanism that determines the value of their products, labor, land and capital. But the way i n which the market integrates them varies such that some peasants have gained (in real per capita income) through market integration, while others have lost most differences among modem peasant economies can be explained by variation i n the type of market that engages peasants rather tharipthe degree to which peasants engage i n a market." 5 The term 'peasant economy' refers here to that sector of the population that i s only p a r t i a l l y integrated by the market.^ The peasant mode of production i s distinguished from other modes of production primarily by the use of family labour i n the production process.^ C. A. Smith has developed a typology of rural marketing system that includes four general models, which she claims can describe and explain aspects of peasant marketing systems throughout the modern world. (Smith 1977)• The four major types of market systems described are referred to as 'interlocking', 'dendritic', 'primate* and 'top heavy'. Detailed descriptions of each of the four types can be found i n Smith's 12 work and w i l l not be included here. However, to i l l u s t r a t e the manner i n which the spatial organization of trade affects the development of the peasant sector, one of the central tenets of this thesis, i t i s useful to compare two of the four types of marketing systems, the 'interlocking' and the 'dendritic', as the former tends to provide peasants with an opportunity to advance materially through market participation, while the latter system tends to result i n the drain of resources from the peasant sector, resulting i n underdevelopment. An interlocking system of market centres i s found i n the central highlands of Guatemala. Within this system "each market centre i s linked to several higher level centres as well as to 13 several lower level centres". J (Figure l a ) . The dual primary 6 (a) Interlocking (b) Dendri tic • Primary center ^ Primary road O Secondary center Secondary road • Tertiary centre FIGURE 1 - R u r a l Market Systems (a) I n t e r l o c k i n g type (b) D e n d r i t i c type. (C.A. Smith, 1977, F i g u r e 8-3, p.126) 7 central places of the region are serviced by six secondary urban centres and by an interlocking system of nineteen large rural market places which bulk rural goods. Trading tends to be com-petitive as both merchants and producers can choose among several market centres at any level for both buying and selling. No one party i s i n a position to determine the terms of trade or the market price. The free movement of goods throughout the rural area allows rural producers to specialize i n one area of production, and the level of economic opportunity i s high. "Today, land, labor and capital are as competitively priced by the market i n the central highlands as are market commodities, and rural access to markets for these factors of production i s relatively unimpeded".^ In contrast, the market network i n the northwestern periphery of Guatemala i s dendritic: market places are strung out along the roads which penetrate the area, becoming progressively smaller with distance from the external markets i n central Guatemala which serve the northwest. The marketing system resembles those of southern Colombia, southwestern U.S.A. and Puno, Peru, described by Ortiz, 15 Kelly and Appleby respectively. ^ In each case, the network of exchange centres forms a branching pattern i n which " a l l lower level centres are tied to a single higher level centre i n a chain that i s entirely vertical without horizontal links''. 1^ (Figure l b ) . 8 The development of a dendritic system usually results from the centrifugal expansion of central commercial interests towards the 'periphery' as 'core' area merchants seek to purchase rural products for a central market, or to develop new market outlets for urban manufactured goods. Due to reduced economies of scale, transportation costs tend to increase towards the periphery so that peasants not only receive the lowest price for their products, but also pay the highest price for 'imported' goods. Because the market i s organized for the convenience of external merchants, the structure of the market system results i n adverse terms of trade for peasants located on the periphery. In addition the dendritic structure tends to foster conditions of monopoly or monopsony. As buyers or sellers i n lower order centres cannot choose between two or more markets, their a b i l i t y to influence the terms of trade i s limited: " I f there i s only one buyer i n existence but many sellers, then the sellers can only 17 choose to s e l l or not to s e l l " . Regional merchants i n secondary centres, often intermediaries for larger trading companies i n primary urban centres, may have a monopoly over the distribution of imports, and a monopsony i n the purchasing of local products because of the structure of the market system. The power of these regional middlemen i s often enhanced by the variety of economic functions they perform; a single merchant may be the purchaser of local products, the vendor of consumption goods, the source of rural 9 credit, and may also control the means of local transportation. As a result, "any surpluses developed by the l i t t l e economy tend to be transferred to the middleman rather than remain available 18 for reinvestment". A dendritic market system may thus lead to the transfer of wealth from the periphery towards the centre, draining the hinterland area of i t s resources: ...the prosperity brought along by a good harvest i s fleeting, and the wealth generated i n the area does not remain there. It i s skimmed off by the merchants, middlemen and speculators, leaving the area and i t s peasants as poor and neglected as they were at the ; beginning. This kind of phenomenon, which has been called •internal colonialism,* i s f a i r l y extended. It means that even i n the regions of prosperous agriculture progressive de-capitalization may occur. This..gccurs even more acutely i n the poor areas. Increasing dependence on imported, manufactured goods also prohibits the expansion and diversification of the rural economy: "Reorganization of the local economy becomes v i r t u a l l y impossible when dependence upon imports from more developed economies i s involved, for undercapitalized peasant producers cannot hope to underprice highly capitalized producers i n the i n i t i a l stages 20 of production diversification". This results i n a situation commonly referred to as * structural dependency'. Opportunities for development within the peasant sector are restricted by the existing market relations. 10 While i t i s recognized that a complex of factors are required to promote agrarian development i n the peasant sector of rural economies, the diffusion of new methods, 'modernization1 and the integration of peasants within the national economy by the extension of communications and transportation links are not sufficient conditions for socioeconomic development. On the contrary, the integration of peasants as producers or primary products for an external market may lead to the 'underdevelopment* of the local economy. Therefore, i t seems c r i t i c a l to analyze the type of market system that exists to distribute local products when attempting to explain or account for the apparent lack of develop-ment within a region. The spatial network created by trade flows and exchange centres indicates the form of market distribution, and reflects the underlying structural relations within the economy. Development and marketing i n southern Veracruz The southern part of the state of Veracruz i s relatively undeveloped i n comparison to the urban industrialized centre of Mexico. The area i s predominantly rural, with only limited urban development i n a few administrative - service centres. The local economy i s based largely upon the cultivation of food staples, pineapple, cane, tobacco, coffee and upon cattle rearing, with some agricultural processing i n the form of sugar refineries, canneries and cigar manufacturing. In contrast to the highland 11 states of central Mexico the population density i s low, communica-tions are poorly developed and access remains d i f f i c u l t to much of the area. Despite national agrarian policy to provide more land and security of tenure and to foster agrarian development, rural poverty persists within the peasant sector. The majority of e.jidos and colonias show few signs of economic development: farming i s primitive, modern f a c i l i t i e s are absent and the standard of l i v i n g i s low. I would argue, contrary to earlier theories of economic dualism, that the lack of development i n the peasant sector does not stem from the marginal position that e.jiditarios and colonos occupy with respect to the national economy, but rather from the way i n which peasants have been integrated into the national economy through the market system. My thesis i s that peasant producers i n this area have been integrated into the national economy as producers of food staples for central urban markets and as consumers of manufactured goods from the earliest days of agrarian reform which gave them the right to dispose of their own surplus production. The rural market system i n this area i s dendritic i n character, and has developed primarily i n response to •external* demand for local products. The predominant trade flows are vertical and horizontal exchange 12 within the region appears to "be limited. The development of the market system i s determined "by the nature and development of transport and communication linkages, and by the nature of local agricultural production systems, particularly the scale of production, the distribution of production centres, and the changing pattern of land use within the area. My i n i t i a l objective was to demonstrate the manner i n which the development of the market system has contributed to the under-development of the peasant sector through the appropriation of surpluses by local middlemen and the subsequent drain of capital from the periphery towards the centre. Specifically, I sought to analyze the way i n which the market i s organized, the type of relations between buyers and sellers, and how and where surpluses are accumulated. Unfortunately, I was unable to realize this objective and therefore narrowed my focus to the development of the market system i t s e l f and the analysis of the factors responsible for changes within the spatial and structural organization of trade and the persistence of particular features of the market 23 system. While I was unable to document the flow of capital through the system or to demonstrate the drain of resources from the regional economy, i t i s possible to show how the organization of the market system has limited the marketing opportunities available to peasant producers within the area. The implications 13 of this for the economic development of the peasant sector are discussed i n the concluding chapter. The main objective of the research then, was to analyze the development of the market system for the bulking of food staples produced by the peasant sector from the turn of the century to 1975* the year i n which f i e l d work was undertaken.2'* The most significant feature of the market system i s the predominance of vertical trade flows over horizontal exchange. Pood staples produced by the peasant sector do not pass through a network of rural market places, but are bulked by local itinerant and sedentary traders, and move upward through a hierarchy of commercial centres within the region before being 'exported' to the urban and industrial centres of central and southern Mexico. Although a number of permanent, daily markets, or mercados, are found i n the small towns of the region, these function to distribute imported goods to local consumers and do not play a role i n the bulking of local agricultural commodities. Factors affecting the development of the market system External demand Growth and expansion i n the urban-industrial sector of the national economy has created a high demand for foodstaples and stimulated the development of a market network to distribute I l l produce from rural areas to the major urban centres. The relatively low level of demand for food staples within the pro-ducing regions has further aided the development of a dendritic market system i n which vertical trade predominates over horizontal exchange. The urban population of Mexico i s increasing at a rate of almost five percent per annum due to the addition of rural-urban 25* migration to the natural rate of increase. Much of the urban population i s concentrated i n the central valley of Mexico particularly within the Federal D i s t r i c t . To the immediate south of Mexico City l i e several industrial centres including the c i t i e s of Puebla and Cordoba. During the f i r s t half of the twentieth century, foodstaples produced i n southern Veracruz were shipped to markets i n this central core. Today, additional demand emanates from the region of the lower Papaloapan River i n central Veracruz which i s mainly devoted to the cultivation of sugar cane, and from the rapidly growing c i t i e s along the Gulf Coast which are associated with the extraction and refining of Mexican petroleum. Meanwhile, a number of factors have contributed to the low level of demand within the research area. These include the lack of diversification within the local economy and the absence of a sizeable urban population. The majority of peasants within the area are engaged i n the cultivation of traditional foodcrops, 15 namely corn, beans and ri c e . Following agrarian reform and the redistribution of land, the level of specialization i n agricultural production declined markedly as peasants turned to cultivating the crops with which they were most familiar, and which required a minimal level of capital investment or of technical expertise. The population of the area i s predominantly rural; prior to 1950, only two towns, San Andres Tuxtla and Santiago Tuxtla, had populations exceeding 5000. Despite the recent growth of several commercial-administrative centres within the area, local food needs are insufficient to absorb the surplus production of the area. Transportati on The d i f f i c u l t y of transportation and the relative inaccess-i b i l i t y of the area contributed to the development of a regional commercial hierarchy. The construction of a r a i l link from central Mexico through the area greatly f a c i l i t a t e d the movement of goods i n and out of the region, but at the same time allowed a group of regional middlemen to control and dominate trade from a series of commercial centres located along the railroad. Poorly developed communications within, the area created a disjunction between inter-regional and intra-regional transportation and assisted i n the development of dendritic trade links as local commercial hierarchies developed around the regional commercial centres. 16 Since 1950 three major highways have been bu i l t through the area providing links with several major urban centres i n central and southern Mexico. This development has strengthened the vertical linkages between the core and the periphery as improved access has f a c i l i t a t e d the penetration of the area by externally based traders. However, the rural road network has been improved only marginally and access to many peasant communities remains d i f f i c u l t . I t w i l l be argued that the d i f f i c u l t y of rural communications i s a factor contributing to the persistence of the dendritic structure despite improved inter-regional transportation. Local production The scale of production i s a c r i t i c a l factor i n determining the structure of the local market system along with the spatial distribution of production centres. When land i s concentrated into a few large holdings, the number of merchants required to serve producers diminishes, whereas the existence of numerous small scale producers tends to support a more highly developed commercial hierarchy and a multiplicity of middlemen (Appleby 1976b). Although land grants were made to peasants i n the form of communal holdings or ejidos, few of these are farmed collectively. The majority of ejidos are divided into individual plots, or parcelas, ranging from five to twenty hectares to which ejido members, or 17 e.iiditarios have usufruct rights. Although the individual e.jido i s a nucleated settlement, the communities are widely dispersed across the landscape and inter-spersed with private holdings. This spatial distribution of production centres combined with the absence of a well developed rural road network increases the cost of transportation i n rural areas, "inhibiting the rationalization of the market system. Over, the time period i n which the development of the market system i s being studied, there have been some changes i n land use. While new land has been brought under cultivation i n some parts of the region, elsewhere the production of foodstaples has declined as alternative crops have been introduced or agricultural land converted to pasture. These changes i n land use have modified the pattern of trade flows and affected the ac t i v i t i e s of local traders. Organization of chapters In the following chapter, the location, boundaries and environmental characteristics of the f i e l d area are described, and the manner i n which the latter have influenced the nature of the agrarian economy and the development of communications i s outlined. In the third chapter I examine the changes that have occurred i n the spatial and structural organization of the market system, focussing on the impact that transportation developments have had. 18 The manner i n which the participants of the market system have adapted to the changing socio-economic environment i s analyzed i n chapter four, specifically how improved communications, competition from external buyers and changing patterns of land use have affected the marketing behaviour of individual traders based within the f i e l d area. A summary of the development of the market system i s presented i n the f i n a l chapter with an assessment of the change i n marketing opportunities for peasant producers within the area. In conclusion, certain questions are raised concerning the impact of the market system and increasing integration of the peasant sector into the national economy, as well as the persistence of small scale middlemen i n the face of increasing competition from external traders and the commercialisation of the market system at higher levels, and some directions for further research are outlined. 19 Chapter One: Notes •SfcGee, 1978, p.9U 2 The term 'Third World' i s used here i n reference to those countries outside the Capitalist West and Socialist blocs, which are variously described as 'developing', 'less developed' or •underdeveloped* (McGee 1978). The Third World comprises approximately 130 non-industrial 'developing' countries (Dadzie 1980), out of which was formed the 'Group of 77* which pressed the United Nations for the establishment of a new international economic order. o -liogan, 1972, p.LU9. The concept of 'dualism* was f i r s t introduced by Boeke (1953) i n his analysis of Dutch economic policies and their impact i n Indonesia. C o r n e r , 1972, p.116. %odder, 1968, p. 193. SlcGee, 1978, p.95. 7 The theory of •underdevelopment' i s well propounded i n the works of Andre Gunder Prank (1966, 19^7). Frank denies the existence of a dual economy and argues that the structure and development of the capitalist system has led to the 'development of under-development* as peripheral areas have been incorporated into the capitalist system. He sees the process of incorporation and the transfer of capital occurring within, as well as between, nations resulting i n • satellisation' as the most backward regions become dependent on, and hence sate l l i t e s of, their regional and urban metropoli, to the benefit of the latter. Critiques of Frank's work are presented by Booth (1975) and Long (1975). Stavehhagen (1969, p.102-107) refutes the "erroneous" theses of dualism and development by diffusion. 20 °Pearse, 1968, p.71-72. ^Smith, C.A., 1977, P.H7. Smith (loc. c i t ) has defined rural marketing systems as "networks of market places that distribute goods produced and consumed by peasants". However, I prefer to define rural marketing systems i n broader terms as "networks of exchange centres" since the distribution of goods produced and consumed by peasants can, and does, occur i n the absence of traditional peasant market places; instead products are bulked and distributed through the warehouses of local middlemen. 1 0 I b i d , p.118. ^Several attempts have been made by anthropologists and rural sociologists to c l a r i f y and define the terms 'peasant', 'peasant economy* and "peasant mode of production'. The main c r i t e r i a of definition are covered i n the various works of Shanin (1971, 1973a, 197313, 1973c), and commented on by Mintz (1973). The concept of 'mode of production' i s amplified by Franklin (1965) and by Long (1975). 1 2Smith, C.A., 1977, 1976a. 1 3Smith, C.A., 1976b, p.320. ^Smith, C.A., 1977, p.127. ^ O r t i z , 1967; Kelley, 1976; Appleby, 1976a, 1976b l 6Smith, R.H.T., 1979, p.l+89. 17Wharton, 1962, p.28. i ft Pearse, 1968, p.73. 1 9Stavenhagen, 1970, p.257. Smith, C.A., 1976b, p . l 3 U . 21 According to the Codigo Agrario, the size of private holdings i s limited to 200 hectares of seasonal land, or 100 hectares of irrigated land. The e.jido. or communal holding, was created to provide security of tenure for peasant farmers by guaranteeing them usufruct rights to the land. More detail on land tenure arrangements i s given i n Stavenhagen (1970, p.230). "The common price for uncleared land was $1.60 TJ.S. per acre. Colonists were usually given ten years i n which to make payment, with a fixed interest rate of 3 percent per annum (Siemens 1961+). •^Appendix I Unfortunately I have "been unable to return to the area since the time that the o r i g i n a l f i e l d work was undertaken. Stavenhagen, 1970, p.21+2. In 191+0, only 35.1 percent of the total population lived i n communities of 2500 or more inhabitants, compared to 61+.9 percent i n 1978. Demographic studies indicate that by the year 2000, Mexico City, which today has a population of about 11+ million, w i l l have a population of 35 million (Gonzalez Casanova, 1980, p.195). CHAPTER TWO SOUTHERN VERACRUZ: PHYSIOGRAPHIC FEATURES AND LAND USE PATTERNS The way i n which the market system has developed i n the twentieth century i n southern Veracruz i s closely related to the organization of local production systems, the pattern of rural settlement and the nature of the transportation system. In this chapter, I would like to examine i n more detail the physical characteristies of the region that influence the nature of the agrarian economy and the development of communications, as well as the his t o r i c a l changes i n the pattern of land use that are c r i t i c a l to understanding the development of the market system. Following a description of the location, boundaries and environmental characteristics of the research area, this chapter focusses on the changing pattern of land use within the area and on the variation i n the supply of agricultural products entering the market system. The mode of production, and the distribution of supply w i l l influence the organization of commerce at the local level, as mentioned i n the previous chapter. The significant features of land use change are (a) the redistribution of land following agrarian reform and the concomitant 22 23 change i n the system of production and (b) the expansion of rural settlement into previously unoccupied zones with a subsequent increase i n the total area under cultivation. In addition to these major developments i n the local agrarian economy, there have been some recent shifts i n the pattern of land use, particularly as the supply of credit and the ava i l a b i l i t y of technological assistance have increased, providing peasant farmers with new alternatives. Location and boundaries of f i e l d area The area designated for research i s located i n the southern part of the state of Veracruz, within the broad belt of relatively low land encircling the Gulf of Mexico known as the Gulf Lowlands. (Pig. 2) In contrast with the densely populated upland basins of central and southern Mexico, the Gulf lowlands have a relatively low population density. The intense heat and humidity and the prevalence of disease have i n the past acted as deterrents to agricultural settlement. During the post-colonial period, the predominant land use has been extensive farming, while large tracts of forest have remained underexploited. Again i n contrast to the highland states of Oaxaca and Chiapas, only limited research has been undertaken i n this region by geographers and anthropologists, particularly with respect to the development of marketing."'" 21+ The research area comprises six municipios (rural adniinistrative areas) forming a "broad belt ll+O kilometres by $0 kilometres, extending from the Gulf Coast southwest to the Oaxacan border. (Fig. 2b) My primary concern lay i n delimiting an area of sufficient size i n which to study the development of the market network. I n i t i a l l y , I intended to r e s t r i c t my research to one municipio t that of Playa Vicente, but the low population density and uniformity of the area did not provide the necessary variation i n accessibility, settlement pattern and land use to assess the effect of these factors upon the development of the market system. As a result I extended my f i e l d area north to the coast. For the sake of convenience i n describing the research find-ings, I have divided the f i e l d area lat e r a l l y into three broad zones corresponding with physiographic divisions: northern (including the municipios of Santiago Tuxtla, San Andres Tuxtla and Catemaco), central (including the municipios of I s l a and Rodriguez Clara) and southern (the municipio of Playa Vicente). In very general terms, the density of population and ease of access decline inland from the coast, although this pattern i s modified by local variations i n topography and s o i l s . Climatically, there i s very l i t t l e real variation throughout the Gulf lowlands: the climate i s sub-tropical. Temperatures are uniformly high ranging from 21° C to 27° C annually, permitting the continuous growth of vegetation. Precipitation i s the c r i t i c a l FIGURE 2 - Location and boundaries of f i e l d area (a) Veracruz state (b) Municipalities comprising f i e l d area. 26 factor i n agricultural production; r a i n f a l l declines inland from the coast (Fig. 3a). The 'wet' and 'dry' seasons are sharply defined as 80 percent of a l l precipitation occurs from July to September. As a result continuous cropping i s only possible on the river floodplains where water i s available for ir r i g a t i o n (Fig. 3D). Physiographic Features northern zone Between the San Juan Elver and the Gulf Coast l i e the Tuxtla uplands, a range of dissected volcanic h i l l s r i s i n g to over 100 metres i n the Sierra de San Martin (Fig. 3a). The f e r t i l e volanic soil s of the southwestern slopes have long supported a f a i r l y dense rural population. The towns of Santiago and San Andres Tuxtla were established i n the colonial period, but there i s considerable evidence of prehistoric settlement throughout these h i l l s . Not only do these slopes have a slightly cooler climate than the interior lowlands, but they also provide protection from the destructive north winds, or Nortes, of hurricane proportions that blow periodically between November and March. As a result of the variation i n aspect and elevation, a wide range of crops can be grown within the area including a variety of FIGURE 3 - (a) Physical features of f i e l d area (t>) Landform regions ("based on Siemens, I96I4, Map Uf P.28A) 28 f r u i t s and vegetables. Traditional shifting cultivation effectively-ceased with the consolidation of land into large estates during the nineteenth century. These haciendas were mainly devoted to the cultivation of sugar cane, tobacco, and coffee, the la t t e r being grown at elevations of over 500 metres. Despite the natural f e r t i l i t y of the s o i l , long intensive use has resulted i n the depletion of s o i l minerals, with a subsequent decline i n agricultural yields. 'Ya no da e l terreno' (the land doesn't yield much anymore) i s a comment repeated often by peasant farmers i n this zone. Contrasting with the cleared, settled south western slopes, the higher elevations and the north eastern slopes of the Sierra de San Martin are sparsely populated, and u n t i l recently covered i n dense forest. A number of new settlements, or coIonias, have been established along the coast since 1950, but much of the forest remains uncleared. Communications to this 'frontier' region are poorly developed, and much of the forest i s d i f f i c u l t to penetrate. In 1975 "the sole access route to the coast was a narrow gravel road from Catemaco that climbs through a pass i n the sierra before dropping down to the port of Sontecomapan. Although several feeder roads are planned to connect the communities along the coast with the main highway, so far none have been completed. Central zone The triangular interfluve between the rivers Tesechoacan and 29 San Juan i s sometimes referred to as the San Juan Evangelista plain (Fig. 3b). These gently undulating plains, or lomas, that characterise the municipios of Isl a and Rodriguez Clara, consist of shallow, arenaceous soils interspersed with gravel and pebbles. For the past three centuries this area has been u t i l i z e d for the extensive grazing of cattle, and the natural vegetation cover of savanna and brushland has been mostly reduced to grass-lands. Until i 9 6 0 only the floodplains were used for agriculture, and even here the danger imposed by periodic, flooding has precluded the expansion of settlements. Although f e r t i l e , the clay alluvium becomes alternatively compacted during the dry season, and water-logged during the rainy season. Prior to agrarian reform and the break up of the large estates, most of this area was contained i n the hacienda Nop alapan, owned by Franyutin, one of the largest cattle ranchers i n southern Veracruz. The rural population of this zone consisted largely of vaqueros (cowhands) and their families, who maintained subsistence plots for their own needs only. Although the well drained soils of these grasslands do not present an impediment to overland transportation, few roads existed within the area u n t i l recently, and the railroad served as the primary means of access. Before the ralroad was b u i l t , the San Juan and Tesechoacan Rivers were used to transport goods 30 i n and out of the area. However, these rivers also present effective harriers to overland transportation owing to the width, velocity and strength of current of both rivers. Today ferries are i n use, but during the time of high run-off when much of the flood plain i s inundated, the service may be suspended for days at a time. Southern zone South of the San Juan Evangelista plain the topography changes dramatically as the r o l l i n g lomas give way to the Isthmian h i l l -land, an old piedmont now deeply dissected by numerous arroyos (gullies). Until the mid twentieth century, the only access to this zone was by boat up the Playa Vicente or La Lana Rivers, both of which narrow considerably upstream, rest r i c t i n g the passage of larger vessels. Although there i s evidence of prehistoric settlement, i n the form of mounds, i n this zone, a map of pre-reform settlement (Pig. 1+a) reveals that most of the population was confined to the floodplain of the river Playa Vicente and i t s tributaries. The forested, central part of the municipio was unoccupied except for a few communities of refugees who fl e d from Oaxaca during the revolution. Over 80,000 hectares was owned by the Chazaro and Dehesa families and by Petroleos Mexicanos. During the 1950*s the land was subdivided and made available for colonisation. FIGURE k - Pattern of rural settlement (a) Pre-reform (based on Siemens, I96I4., Map 5) (b) Present day (sources: Guenca del Rio Papaloapan, Carta General), Comision del Papaloapan, November 1972; Siemens, 1961+, Map 10 32 This area comprises the second 'frontier' zone within the research area. Although i n i t i a l l y high crop yields were obtained once the forest cover was removed, the red clay soils are subject to rapid leaching i n the tropical climate and to laterisation. As a result agricultural yields have declined steadily i n the last decade. Purthermore, the high clay content of the s o i l combined with the h i l l i n e s s of the terrain makes road transport particularly d i f f i c u l t , 3 and sometimes impossible, during the rainy season. The impact of agrarian reform Before the Mexican'. Revolution, which lasted from 1910 to 1917» the hacienda was the dominant element i n the rural landscape by virtue of i t s size and i t s role i n the local economy.^ By 1910 most of the land i n this area had been enclosed i n large estates devoted to commercial crop production or cattle ranching. Only a few 'free' villages remained. According to Winnie, 80 percent of the population of rural southern Veracruz had no land of their own. People lived i n villages located on hacienda lands as peones  acasillados (indentured labour) or else i n nearby communities and worked on the hacienda as peones alquilados (hired labour). Peons were permitted to cultivate their own small plots to meet sub-sistence needs, or else participated i n a share cropping agreement 33 with the hacendado (owner of the hacienda). In short, the peasant population had l i t t l e control over the means of production or the distribution of the surplus, and were dependent upon the hacienda for employment and services. Latifundismo (the concentration of land i n large private holdings) and the intolerable l i v i n g and working conditions of the peons were the causes of the peasant uprisings i n the state of Morelos that sparked the c i v i l war and resulted i n the overthrow of the dictatorship of Porfirio Diaz. The new Mexican constitution of 1917 introduced regulations to ensure a more equitable distribution of agrarian lands by preventing the concentration of land into a few large holdings and by providing security of tenure for the peasant population. The latter involved the 'return' of former village property to peasant communities wherever possible. Needless to say, the expropriation and subdivision of the many latifundia occurred slowly, and i n southern Veracruz many hacendados attempted to retain control of their property. It was not u n t i l the 1930's, under the Cardenas administration, that many of the large estates were broken up and ejidal t i t l e s granted. Two types of rural settlements were created as a result of agrarian reform: the small private farm (pequena propiedad) and the communal village holding (e.jido). Private farms were 3h generally limited to 200 hectares of seasonal land or 100 hectares of irrigated land.^ E.jidos vary i n size; sections of land were granted to groups of peasants on condition that the land could not be alienated. Individual members or ejiditarios were allocated plots, or parcelas, to which they have usufruct rights only; plots may not be sold, rented or mortgaged. Management of the land rests with an elected council of e.iiditarios headed by the Comisariado  E.jidal. Failure on the part of a member to f u l l y exploit his 7 parcela can result i n i t being transferred to another member. The legal size of ejidal plots has varied over the years: i t began with four cultivable hectares, and i s at present twenty hectares of g seasonal land, or ten hectares of irrigated land. . The majority of ejidos within the f i e l d area are associated with the old pre-reform villages (Fig. k)» As can be seen from the map the highest concentrations of settlement occur on the southwest slopes of the Tuxtla h i l l s and along the floodplains of the San Juan and Tesechoacan-Playa Vicente Rivers. The varying density of population i s reflected i n the size of ejidal plots: i n the central zone, individual parcelas are generally 20 hectares i n size, whereas i n the Tuxtlas plots range from 5 "to 20 hectares, averaging 13.6 hectares. Immigration from other parts of the state produced a marked increase i n the total rural population of this area from 1930 to 1950, but during this period there was l i t t l e change i n the overall 35 distribution of the population. 3 - 0 The main impact of agrarian reform was the change in the system of production and i n the pattern of land use. Foremost i s the reduction i n the scale of production that resulted from the creation of new settlement types. Although the e.jido i s essentially a communal holding, few ejiditarios farm their land collectively. Secondly, while the typical hacienda was labour rather than capital intensive, i t was a commercial enterprise with production oriented to the international market. After the haciendas were subdivided, and peasants gained control over the means of production; specialized crop cultivation declined and was replaced by foodstaples. Peasants tended to grow the crops with which they were most familiar, that met their subsistence needs, and which did not require a high level of technological knowledge or capital investment. The production of corn and beans increased, while that of cane and tobacco decreased. Peasants continued to 'gather' coffee from existing bushes on former hacienda lands. The previous marketing channels that existed to distribute the commercial crops produced by large scale farmers were not adequate to meet the needs of the numerous small-scale, often subsistence oriented, producers. Because of the commercial orientation of the hacienda economy and the dependence of most of the rural population upon the hacienda for their various needs (most purchases were 36 made at the hacienda store), no internal periodic market system developed to distribute products l a t e r a l l y across the region. As a result the colourful market places of highland Mexico are absent from this area. Under the hacienda economy, the hacendados themselves under-took the responsibility for the marketing of their products. However, on the newly formed ejidos peasants lacked both the capital reserves and the marketing knowledge to seek outlets for their products. It was under these circumstances that a dendritic marketing system evolved to absorb local agricultural surpluses and to meet the urban food demands of the industrialized 'core' of the nation. While the Mexican revolution destroyed the power of the land-owning aristocracy, i t provided an opportunity for the development of a new rural merchant class. Before the revolution, the owners of the haciendas provided the link between the nation and the peasant community. This mediating, or 'brokerage' function has now passed into the hands of 'nation-oriented' individuals from rural areas. The development of the dendritic market system i n this area following agrarian reform i s characterized by the domination of regional merchants acting as intermediaries between the peasant producers and the central trading houses. 37 '...we see that due to agrarian reform i n Mexico, the rural economic and p o l i t i c a l power centres have moved from the hacienda to the regional towns, that a ruling class of large landowners has "been displaced "by a regional bourgeosie ...composed of merchants, store-owners, public o f f i c i a l s and professionals of certain kjnds whose ac t i v i t i e s relate to agriculture'. The expansion of rural settlement As early as 1926, a law pertaining to the colonization of unexploited lands had been passed, but i t was not u n t i l after 191+6, when a National Colonization Commission was established to oversee the transfer of land to would-be settlers, that colonization of the unoccupied frontiers of the Gulf lowlands took place on a 12 significant scale. Under the Colonization Act, the owners of large tracts of uncleared land could receive government compensation for the release of their property, which was then subdivided and 13 sold at marginal cost to landless farmers. J Alternatively, a group of farmers could petition for the expropriation of unused land. The aim of this policy was twofold: i t was intended to relieve the pressure on the land i n the densely populated upland baBins of Mexico, and to provide land for the landless i n areas hitherto unexploited. The movement of people from the upland states of central and southern Mexico into the Gulf lowlands i n search of land during the 19f>0's and 1960's became known as 'El Marche a l mar', ('The March towards the Sea'). 38 Between the 1950 and I960 a number of new settlements were established i n the central part of the municipio of Playa Vicente and along the northern slopes of the Tuxtla range (Pig. bh). Apart from the demarcation of boundaries and the preparation of the necessary documents, no assistance was given to the settlers. The tasks of cutting an access route through the forest, clearing the land and preparing the site f e l l upon the shoulders of the colonists. Land within the colonias i s privately owned. Lot sizes range between ten and f i f t y hectares. The process of clearing the forested land was slow and arduous without powered equipment, and during the f i r s t years of settlement only a small portion of the land was brought under cultivation. However, as more land was cleared and planted, the high yields obtained from the deforested soil s produced large agricultural surpluses i n these frontier zones. Although production was high, the relative isolation of these communities and the lack of well developed communications presented the colonists with a variety of marketing problems. Recent changes i n land use Prom the preceding discussion we see that during the f i r s t half of this century the supply of foodstaples increased f i r s t as a result of land redistribution and the subsequent change i n fanning practices, and secondly due to the increase i n the area 39 under cultivation as rural settlement expanded into the 'frontier' zones. The general pattern of land use i n 1962 i s shown i n Figure $a. It can be seen that the cultivation of food crops predominates throughout most of the area except for the San Juan Evangelista plain, devoted to extensive grazing, and the area around the sugar refinery at Cuatotolapan where farmers are contracted to produce cane for the m i l l . Up u n t i l I960, the Tuxtla region was the major source of production of corn and beans, and the area was known as the 'granary of Veracruz', ('La granaria de Veracruz'). The high density of population and natural f e r t i l i t y of the soils contributed to the high volume of production. According to Leon Medel, a native of San Andres and a local historian, the peak years of production were i n the 19U0's. Although no accurate data for the annual volume of production for this area are available, discussions with local farmers and merchants confirm this. However, i n recent years the production of both corn and beans has declined. Years of intensive use have depleted the soil s of minerals lowering yields. Peasant farmers i n the Tuxtla region complain that 'the land i s tired', ('la t i e r r a es oansada'). The small size of individual plots and the h i l l i n e s s of the terrain prohibit the widespread mechanisation of farming; the application FIGURE 5 - (a) Generalized pattern of land use Circa 1962 (Siemens, 1961+, Map 13, p.lll+a) (b) Predominant land use 1975 (Source: Fieldwork, 1975) hi of f e r t i l i z e r to the s o i l has resulted i n the proliferation of a vine (be.juco) that strangles the maturing corn creating a further problem for farmers. The higher r a i n f a l l i n this zone tends to give a high moisture content to harvested corn. As new areas of corn production have opened i n the drier region to the south, yielding a higher quality corn, the Tuxtlas have lost their comparative advantage. Because of these various problems and the low price received for corn, Tuxtla farmers have chosen to shift to alternative crops. The production of cane, tobacco, coffee and c h i l i pepper has increased. Tobacco and coffee are now grown on e.jidos with credit and supervision from the respective national marketing agencies of Tabamex and Inmecafe, which control the supply and distribution of these products within the country. A growing number of ejidi.tarios are contracted to grow sugar cane for the mills of San Miguel, San Pedro and San Francisco Narajal located near Lerdo de Tejada by the mouth of the Papaloapan River (Fig. 6). The most dramatic change to occur i n the pattern of land use within the last decade has been the transformation of the pastures of the central zone (Fig. 5)» With technical and financial assis-tance from the rural credit banks, ejiditarios are now using tractors and f e r t i l i z e r s on the former glasslands to produce high yields of good quality corn of up to four tons per hectare. The low r a i n f a l l during the period when the corn i s ripening and the relatively f l a t topography make this area particularly suitable h2 for agriculture. Although the total volume of production for this zone i s s t i l l lower than that of the Tuxtlas, the area attracts a large number of "outside" buyers during the harvest season and i s becoming one of the major corn producing regions of southern Veracruz. The cultivation of pineapple, formerly grown only on private holdings, i s also increasing on the ejidos. Three canneries (two privately and one publicly owned) already exist i n V i l l a I s l a and one was under construction i n Rodriguez Clara at the time of fieldwork. Within the southern zone, corn and rice continue to be grown on the floodplains of the Playa Vicente and La Lana Rivers, but the production of corn and sesame i n the central part of the municipio has declined sharply since i 9 6 0 . According to one buyer, corn production has dropped by 80 percent and that of sesame by 50 percent. A land capability study by the Papaloapan River Basin Commission concluded that the soils of the Isthmian h i l l - l a n d are generally unsuitable for agriculture owing to the rapid leaching of nutrients once deforestation has occurred, but that i f permanent pasture i s sown, the land can support two head of cattle per hectare^ /Credit i s now being offered to both ejiditarios and colonos through the Banco de Credito Rurale de Ckilfo to assist and encourage farmers i n making the transition, and technical assistance i s offered i n preparing the land and raising the stock. h3 These recent changes i n agrarian land use within the f i e l d area can "be expected to have a significant impact on the local market networks and commercial organization that developed i n the f i r s t half of this century immediately following agrarian reform and the establishment of new settlement. The development of the market system and the impact of improved transport and communications are discussed i n the following chapter within the context of the socio-economic and p o l i t i c a l changes that have "been described above. kk Chapter Two; Notes 1 Works on southern Veracruz include Siemens (1961+a, 196l+b), Ballesteros (1970), Winnie (1958), Cook and Cook (1972). ^Pranyutin was reputed to own 1+5,000 head of cat t le . 3 •"The surfaces of the d i r t roads, while compacted i n the dry season are quickly churned into mud during the rainy season. Also, during the la t te r , steep sided creeks that are fordable at other times of.the year are converted into raging torrents "by high runoff, and form an effective barrier to the movement of vehicles. ^Siemens, 19614b, p.1+6. More detailed descriptions of the hacienda are found i n Whetten (19I+8) and Chevalier (1963). Siemens ( loc. c i t . ) offers a brief description of the hacienda: The hacienda of southern Veracruz, the dominating rural settlement type i n the region, was i n most cases a large estate, characterist ical ly devoted to catt le or commercial crops. I t featured a sizeable central residential and administrative compound, i n or near which usually l ived one or more groups of peones  acasil lados. •'Siemens, 1961+b, p. 1+9. faStavenhagen, 1970, p.230. 7 'In spite of these regulations, many e j idal plots are i l l e g a l l y rented and sold to other e j id i tar ios or private farmers. Q Stavenhagen, 1970, p.237« Here i t i s also noted that i n fact "many ejido farmers have less than what the law grants them. In I960, the average size of the ejido farmer's plot was 6.5 hectares of cultivable land, but 1+1+ percent of a l l e j id i tar ios had less than 1+ hectares, and only 15 percent possessed more than ten hectares". U5 ^In the municipio of San Andres Tuxtla the average ejidal plot size i s 13.8 hectares, i n Santiago Tuxtla i t i s 11.5 hectares, and i n Catemaco 15.1+ hectares. (See Appendix U). 1 0Further details of population change i n southern Veracruz are given i n Siemens (196I+). 1 1Stavenhagen, 1970, p.268-9. 1 2According to Siemens (1961+p, p.78) there were only seven colonias i n a l l the Gulf states i n 191*3, tut "by 1962 there were 175 colonias i n Veracruz alone. ^Among the colonias I visited, the i n i t i a l price for uncleared land ranged between 50 to 60 pesos per hectare, corresponding to the figure of $1.60 U.S. per acre given by Siemens (19614a). ^Diagnostico socioeconomico de l a Cuenca del Papaloapan, 1973* ^ I n 1975 the Banco Nacional de Credito E j i d a l (Banco E j i d a l ) , the Banco Nacional de Credito Agropecuario del Sureste (Banco Agropecuario). and the Banco Rurale de Credito Agricola del  Papaloapan (BRAPSA), merged to form the Banco de Credito Rural  del Golfo, serving both private farmers and e.jiditarios. CHAPTER THREE CHANGES IN THE MARKET NETWORK: IMPACT OF TRANSPORT DEVELOPMENTS ON TRADING PATTERNS When 'external* demand for a product, or products, predominates over 'internal* demand within the producing region, the market system w i l l he organized i n such a way as to f a c i l i t a t e the move-ment of goods out of the region i n the most efficient manner. The result i s a market network i n which 'vertical' flows of goods between the urban 'core* and rural 'periphery' predominate over 'horizontal' flows within the periphery. However, the particular form and structure of the market system i s largely determined by the nature of the transportation system. This part of Veracruz i s characterized by i t s relative isolation and poorly developed conununications. Access to the area has gradually improved since 1900 f i r s t l y through the extension of the national railroad system, and secondly, although much later, through the expansion of the national highway system (Fig. 6). Developments i n transportation have emanated from the 'core' areas of the country, and gradually extended into the 'periphery*. As a result inter-regional transport has become more effici e n t , but this development has not been matched by comparable improvements i n intra-regional comniunications. The rural road network remains poorly developed; the majority of rural roads are ungraded and unsurfaced. h6 Southern Mexico : Transportation network FIGURE 6 - Main transportation routes through southern Veracruz and adjacent states i n southern Mexico 48 The purpose o f this chapter i s to examine the changes i n the local market system from the turn of the century to 1975 t»y focussing on the impact that developments i n the transportation system have had on marketing. Figure 6 shows the major transporta-tion routes through southern Veracruz, and Figure 7 provides a more detailed map of the f i e l d area, indicating the main transporta-tion linkages as well a s communities visited during the course of fieldwork. Until the turn of the century, riverine transportation pre-dominated as no major overland routes yet existed. The San Juan and T e s e c h o a c a a Rivers formed the main transportation arteries, although pack animals were used for overland transport within the region. Goods were shipped down river i n flatboats (chalanes) or by steamship to the mouth of the Papaloapan to ports on the Gulf coast. During the f i r s t decade of the twentieth century, the railroad was extended southwards from central Veracruz towards the Isthmus of Tehuantepec, providing a direct link with the developed 'core* of central Mexico. An extension line from E l Burro (now Rodriguez Clara) to San Andres Tuxtla was completed by 1913, although the railroad did not come into f u l l service u n t i l 1922. Movement by r a i l rapidly supplanted riverine transport, and a number of small towns functioning as bulking and distribution centres grew up along k9 FIGURE 7 - Fie l d area: Transportation network and principal centres of population and production. 50 the railroad around designated stations. In 1953 "the coastal highway from Veracruz passing through Santiago Tuxtla, San Andres Tuxtla and Catemaco was completed, and subsequently extended east along the Gulf Coast toward the Yucatan Peninsula. While communication improved markedly i n the northern zone, access to the central and southern zones remained poor. By I960 a road had been bu i l t from I s l a to Santiago Tuxtla, but i t was not paved and open to heavy t r a f f i c u n t i l 1968. It was not u n t i l the early 1970's that a substantial improvement i n the access-i b i l i t y of the central and southern zones occurred as two major highways were b u i l t through these areas forming linkages with the national network. The era of riverine transportation The h i s t o r i c a l antecedents of the contemporary market system, dominated by vertical exchange, l i e i n the nineteenth century; the "domination of the rural economy by the commercially oriented hacienda precluded the development of an internal exchange system with a network of rural market places. The majority of the haciendas i n the Tuxtlas and i n the dissected h i l l - l a n d to the south were devoted to the production of cash crops: coffee, tobacco and sugar cane. The i n i t i a l processing often took place on the hacienda i t s e l f , for example the drying of tobacco leaves and the shelling of coffee beans. The high quality 51 tobacco grown on the south western slopes of the Tuxtla h i l l s was used i n the manufacturing of cigars for the European market, the centre of this industry being San Andres Tuxtla. The marketing of local crops was i n the hands of the hacendados or rural landowners. Most of the products were shipped out of the area along the Tesechoacan and San Juan Rivers to the port of Alvarado on the lower Papaloapan River, although some products were taken overland to the port of La Paz (now Sontecomapan) operated by the coastal steamer company La Compania Mexicana del Golfo. From there they were taken to Veracruz for delivery to national markets or else shipped to overseas markets. The Rivers Tesechoacan and San Juan were navigable by steamship as far as Playa Vicente and San Juan Evangelista respectively (Fig. 6). Steamship service was provided by two r i v a l companies: those of Sheleske & Bailey and Perez and Chazaro.''' Jose L. Perez, Juan Chazaro and Eduardo Sheleske also owned three of the largest wholesale, import-export companies, or casa comerciales, i n Veracruz, which together with their monopoly over riverine transportation gave them control over a large portion of trade within the state of Veracruz. 2 These casas comerciales not only purchased the products of the haciendas but also supplied them with imported merchandise. Basic necessities were distributed to the rural population through 3 the hacienda store. Peons l i v i n g i n the hacienda villages 52 cultivated their own plots to meet subsistence needs, but 'the marketing of produce grown on these plots, was usually not allowed'.^ In La Historia de Veracruz, Melgarejo mentions that only comerciantes (merchants) and hacendados were able to store grain, and that the extreme misery of the peasants prevented them from storing even a 5" small part of their harvest. People l i v i n g i n the 'free villages' were not bound by the same restrictions as the peons on the haciendas, however, by 1910 few free villages remained and the majority of the population worked on the haciendas as peones  alquilados (hired labour). Although limited information i s available on marketing for this period, i t would appear that as a result of the export orientation of the hacienda economy, the absence of free villages and the control of both production and marketing by the hacendados no internal periodic market system developed within the area, hence the absence of rural market places. Tb,e coming of the railroad and the Revolution The construction of the railroad, the Ferrooerril de Isthmo. from Tierra Blanca to the Isthmus of Tehuantepec, with an extension line to San Andres Tuxtla was to alter the pattern of transportation within the area and lead to the development of a number of new commercial centres. This development i n transportation coincided with the redistribtuion of agrarian land and the creation of the 53 ejido. The large commercially oriented estates were replaced gradually by numerous small holdings and private holdings of a smaller scale. On the ejidos peasants tended toward the cultivation of familiar subsistence crops, working with limited capital and using traditional farming methods. The particular route taken by the railroad was decided as much by the interests of local parties as i t was by the engineers of the railroad company. Construction south from Tierra Blanca began i n 1902 and the line was completed as far as Santa Lucrecia (today Jesus Carranza) by 1901+. The company had already located a station at Estacion Rives (known loca l l y as E l Burro after the rancho of that name). However, the location of another station fifteen kilmetres to the west was due to the intervention of Alonso I s l a Camacho whose rancho lay adjacent to the railroad. He successfully gained the friendship of the railway engineers, and using the arguments that the railroad crossed his land and that he had provided wood f o r the sleepers, pursuaded them to establish another station known as Campamento Cinco. later Estacion I s l a . Both E l Burro and Campamento Cinco expanded to become significant regional commercial centres renamed Rodriguez Clara and V i l l a I s l a respectively (Pig. 7)« Originally an extension line was planned from I s l a to Santiago Tuxtla, but the owners of the sugar refinery at Cuatotolapan allegedly offered the company $50,000 U.S. and free passage across their land together with wood for the sleepers i n order to re-route the line v i a the refinery. As a result the extension was bu i l t from E l Burro through Cuatotalapan to San Andres Tuxtla instead, a decision that was to have a considerable impact upon the development of regional market networks. Although the line was completed i n 1913, f u l l service did not commence u n t i l 1922 when the country returned to relative s t a b i l i t y . From ±910 to 1920 .the whole country was i n a state of upheaval: 'todo e l pais anduviera en revuelta'. Peasant uprisings i n the state of Morelos triggered a c i v i l war that spread throughout the country. Veracruz was by no means immune from the r i s i n g anarchism 7 that pervaded Mexico. The countryside was subject to numerous attacks from bandits and guerillas who decimated the herds of the g haciendas, burned crops and set f i r e to buildings. Many peasants invaded hacienda lands, and several of the hacendados fle d their properties. Local production was disrupted and local commerce was adversely affected. The formation of a dendritic market network: 1920-50 By 1920 most of the fighting had died down and a period of relative s t a b i l i t y ensued. With the return of normal service on the railroad commerce began to flourish i n southern Veracruz. The direct link with urban centres of demand i n central Mexico provided a 55 stimulus to local trade. Although the new national constitution of 1917 provided the guidelines for agrarian reform, the re-distribution of land was slow and legal recognition of new property boundaries did not take place u n t i l the 193 n' s under the Cardenas administration. As discussed i n the previous chapter the impact of agrarian reform was to reduce the scale of production and to increase the total area devoted to food crop cultivation. The rural population of this area increased as a result of immigration from more densely populated areas where land was scarce: "the end of debt bondage ...permitted or forced large numbers of people to leave their local communities, and to seek new opportunities else-9 where". As riverine transport declined i n favour of r a i l transport, a number of regional commercial centres developed along the railroad, functioning as bulking and distribution centres for their hinterland regions, namely San Andres Tuxtla, Rodriguez Clara, V i l l a I s l a and V i l l a Azueta. As already mentioned, the lack of diversification within the rural economy and the absence of a pre-existing internal market system together encouraged the growth of vertical trade over horizontal exchange. The network of trade flows formed a branching pattern as a l l products entering and leaving the region were funnelled through these centres (Fig. 8a). Producers from nearby villages often brought FIGURE 8 - Development of maxket network (a) 1920-50 (b) 1950-60 57 sackfulls of harvested corn or beans into town on horseback to s e l l to a merchant. Where the distances were too great, entailing a journey of two or more days, bulking occurred either within the ejido i t s e l f , or i n a village that developed as a subsidiary trading point either by virtue of i t s size or central location to surround-ing communities. The nature of the transportation system contributed to the formation of a hierarchical trading structure. Rail transport f a c i l i t a t e d economies of scale, thereby favouring those traders with access to capital resources. Rail freight rates were calculated by the r a i l - c a r , or furgon, which held f i f t y tons of corn. Further economies of scale could be achieved i f merchants were engaged i n two way trade and were able to use the same r a i l cars to import merchandise. In addition, i t was apparently necessary to have some degree of influence with the r a i l company to transport goods at a l l . As i n the earlier period when the owners of the casas comerciales i n Veracruz also managed the steamship service, powerful regional traders emerged who effectively monopolized the use of the railroad. Meanwhile transportation within the hinterlands remained primitive: villages were connected to regional centres by a network of local roads, or catninos vecinales, that were l i t t l e more than bridle-paths. The major buyers of foodstaples within the region were often the owners of large r e t a i l outlets, supplying not only the urban population but also the surrounding rural areas. Goods were 58 distributed to the hinterland through a network of village stores or tiendas. Money lending was an integral part of the marketing process. Tienderos (store owners) often received goods on credit from the casas comerciales i n town. Peasant farmers with limited capital reserves, were able to obtain items of merchandise on credit from the local tienda by making an agreement to deliver a portion of their harvest, often at a predetermined price that was below that of the market price. The tienderos bulked crops from the local area, and i n turn delivered them to the regional comerciante. As well as these sedentary village buyers, a number of itinerant buyers worked as intermediaries for the regional comerciantes. These traders travelled with packtrains of horses or mules to the more isolated communities. Peasants lacking their own means of transport relied on the services of these itinerant traders, who were usually given a sum of operating capital with which to purchase grain, and then paid on a commission basis. Northern zone The decision to terminate the r a i l line at San Andres Tuxtla rather than at Santiago led to the growth of San Andres, already a well established town, as the major commercial centre of the Tuxtla region. The well developed market network i n this region, during this period, was related to the relatively high density of population contributing to a high volume of production. The sphere of 59 influence of the comerciantes based i n San Andres extended through the municipios of Santiago Tuxtla, San Andres Tuxtla and Catemaco, stretching from the coast south to the San Juan River. The latter formed a barrier to communications between the northern and central zones. With the exception of a few isolated communities on the northern slopes of the Sierra de San Martin and along the Gulf coast the majority of peasant farmers traded at least part of their harvest. Within the dendritic structure there existed two distinct commercial levels. Peasant farmers from ejidos close to San Andres, such as Comoapan, generally undertook the marketing of their own produce, and dealt directly with one of the major comerciantes i n the town. However, those i n more distant villages, who lacked their own horse or mule, or who were unwilling to risk the hazardous journey of several days, sold their crops to sedentary of itinerant buyers. The larger villages of Catemaco, Sontecomapan and Salto de Eyipantla and the town of Santiago Tuxtla served as sa t e l l i t e trading centres within the regional hierarchy. It i s interesting to note that the village of Tilapan functioned as an independent centre due to i t s location on the railroad. The surplus production from this ejido and from neighbouring villages was bought by the station master, jefe de estacion, who dealt directly with wholesalers i n central Mexico instead of with those merchants i n San Andres Tuxtla. 60 Within San Andres, three or four comerciantes effectively monopolized regional trade i n corn and "beans; (a similar situation applied to the tobacco trade). During the 193n's Emilio Lopez Miranda, Antonio Gonsalez and Fernando Fernandez handled most of the •export' i n these products. During the 19l+0's Lopez Miranda, Camacho Aqua and Alfredo Pretelin were reputed to be the major buyers. In addition to bulking local products for distribution to the urban markets of central Mexico, Lopez Miranda and Camacho Aqua were two of the largest importers of merchandise i n the Tuxtla region. Although i n competition with one another, these comerciantes, or acaparadores as they were known locally, formed an oligopoly setting the terms of trade within the region. 3" 0 There was considerable overlap of trading areas but each comerciante sought to establish his own sphere of influence. Lopez Miranda, alleged to own the largest trading enterprise i n the region, bought foodstaples throughout the Tuxtlas, but apparently controlled most of the trade east of San Andres and i n Catemaco. Meanwhile Camacho Aqua pur-chased mainly from villages to the south of San Andres as far as the San Juan River. The level of competition among the intermediary traders was reputedly high. However, since the market price was set by the comerciantes i n San Andres, these traders could not afford to raise 61 the price offered to producers, which was generally "below that of the market price. Because of the dendritic structure of the market system, producers had no market alternatives. Central zone Within the central zone a series of small towns, or pueblos, functioning as bulking and distribution centres sprang up around the railroad stations of V i l l a Azueta, V i l l a Isla, Rodriguez Clara (formerly E l Burro) and Juanita (Fig. 8 a ) . Local trade flows formed a radial pattern around each centre. The volume of trade i n this zone was lower than that of the northern zone as the population density was lower, and the majority of ejiditarios cultivated only one to two hectares of the floodplain, primarily for their own n e e d s . T h e sphere of influence of comerciantes i n each of these corresponded to the areas now enclosed within the respective municipio boundaries. Competition from comerciantes i n adjacent towns, who also had access to the railroad inevitably restricted the size of trading networks. Because of the shorter distances involved, few sa t e l l i t e centres evolved, although i t was not uncommon for some bulking to occur at the village level. Of the pueblos i n the central zone, Rodriguez Clara and V i l l a Azueta were the most significant as trading centres. The former was located at the junction of the two r a i l lines and was therefore a major transfer point. V i l l a Azueta, located on the crossing of the 6 2 railroad over the river Tesechoacan, served as a transfer point for a l l goods shipped to and from the pueblo of Playa Vicente. Products from the southern zone were either brought down river i n chalanes, or else carried on horseback, to V i l l a Azueta from where they were taken by r a i l to markets i n central Mexico. A few traders from V i l l a Azueta made regular excursions to the ejidos i n the f o o t h i l l s of the Sierra Madre to purchase coffee, but most of the trade i n the southern zone was handled by comerciantes i n Playa Vicente i t s e l f . Southern zone Playa Vicente, at the upper limit of navigation of the Rio Playa Vicente - Tesechaoacan, was known as a trading post during the nineteenth century. Following agrarian reform, i t expanded as a commercial centre serving the rural population of this southern zone which was largely concentrated along the tributaries of the Rio Playa Vicente and along the Rio de l a Lana. The network of trade flows that developed was similar to that of the Tuxtla region, forming a distinct dendritic pattern. Peasant farmers from villages such as E l Arenal and Nigromante immediately to the south of the town brought their products into Playa Vicente on horseback to s e l l to one of the comerciantes who bulked goods within this region. South of Playa Vicente, the village of San Jose Rio Manso was 63 reputed to be a minor commercial centre serving the string of ejidos along this tributary of the river Playa Vicente. In a similar manner Tatahuicapa functioned as a bulking and distribution centre for those communities along the Bio de l a Lana. Boring the rainy season this river was used to transport some products directly downstream to Juanita; however, for most of the year the narrowness and shallowness of the channel prevented the extensive use of this route. As a result villages i n this area were drawn into the dendritic network that centred on Playa Vicente. Here too, those comerciantes responsible for purchasing local commodities also functioned as distributors of various manufactured items and food products not produced locally. Many of these goods were supplied on credit to peasant farmers i n return for the delivery of their harvested crops. In summary, the overall pattern that emerges i n the spatial organization of trade within the research area following the construction of the railroad i s that of a typical dendritic structure consisting of a hierarchy of commercial centres 'wherein any centre deals with a number of lower level centres but with only one higher 12 level centre'. In this case, four commercial levels can be recognized: ( l ) the major urban centres outside the region -Mexico City, Cordoba, Puebla and Veracruz - that were a source of demand for local products as well as a source of supply for various manufactured items and other merchandise; (2) the regional commercial 61+ centres of San Andres, Tuxtla, Rodriguez Clara, V i l l a Isla, V i l l a Azueta and Playa Vicente, through which a l l goods entering and leaving the region were funnelled; (3) subsidiary bulking distribution centres, or s a t e l l i t e centres, serving a group of villages within the hinterland; (lj.) the ejidos or actual centres of production (Pig. 9 ) . Within the region, trade was effectively controlled by a small group of multifunctional traders based within the regional commercial centres. Common reference to these merchants as 1 l o s  acaparadores' (those who corner the market) by local farmers lends support to the claim that these individuals did indeed exert a monopoly on trade within the region. Peasant farmers, or ejidi t a r i o s , sometimes dealt directly with these merchants, but often traded through a small scale intermediaries. These small scale traders lacked both the resources and the p o l i t i c a l influence to use r a i l transport and/or to seek market outlets outside the region. The nature of r a i l transportation allowed a small group of powerful traders to monopolize regional commerce and to determine the market price for goods within the region. Network changes from 1950 - I960 The completion of the coastal highway In 191+9 work commenced on a highway south along the Gulf Coast from Veracruz, passing through Santiago Tuxtla, San Andres FIGURE 9 - Change i n the hierarchical organization of the market system, indicating the pattern created by the movement of foodstaples towards urban markets. 66 Tuxtla, and Catemaco (Fig. 6 ) . By 1953 this section of the highway was open to t r a f f i c , and i t was subsequently extended eastwards through the states of Tabasco and Campeche towards the Yucatan Peninsula. The proportion of goods transported by r a i l from San Andres Tuxtla rapidly diminished as trucking was faster, cheaper and more convenient. The road also provided access to new markets: Alvarado, Lerdo de Tejada and the sugar refineries of San Pedro, San Miguel and San Francisco. The latter employ a large number of seasonal labourers, and the demand for foodstaples i s high i n this cane growing belt along the lower Papaloapan. The highway also provided access to the urban centres of Acayucan, Coatzalcoalcos and Minatitlan to the southeast (Fig. 7)« With improved communications, the relative importance of San Andres Tuxtla as a major bulking centre declined, while that of the other towns along the highway, particularly Santiago and Catemaco grew. As feeder or connecting roads were bu i l t from ejidos to the highway, more bulking began to take place close to the source of production. Buyers could now drive directly to the e.jido, or else to the nearest centre on the highway. Large warehouses began to appear beside the highway i n both Catemaco and Santiago. Those adversely affected by this development were the large scale comerciantes i n San Andres Tuxtla, whose monopoly over local trade was seriously undermined both by the appearance of 'outside' 67 buyers from urban centres along the Gulf coast and from the newly gained independence of local small scale traders. The shift from r a i l transport to trucking reduced the level of capital investment required to transport grain out of the region. It was no longer necessary to accumulate enough grain to f i l l a r a i l car, nor to maintain extensive storage f a c i l i t i e s to house the grain while awaiting shipment by r a i l . Many small scale traders who had previously acted as intermediaries for the regional comerciantes be-; gan to operate independently, buying small quantities of grain, from up to five tons, and trucking this small load directly from the e.jido to a wholesaler outside the region, bypassing San Andres Tuxtla (Fig. 8b). The construction of the highway not only altered the spatial network of bulking centres but also affected the hierarchical structure of the local market system. While ver t i c a l trade continued to predominate, traders i n lower level centres no longer dealt only with one higher level centre but with several. At the same time, improved communications allowed small scale traders to bypass the regional commercial centres, thereby reducing the length of the chain of intermediaries (Fig. 9 ) » These changes i n the market system were, however, restricted to the Tuxtla region as there was limited improvement i n communications throughout the rest of the f i e l d area. Although a ^gravel road was l a i d from Santiago Tuxtla to I s l a i n 1955, t r a f f i c 68 along this road was limited "both "by the poor quality of the road surface and the difficulty of crossing the San Juan River particularly during the rainy season when much of the wide floodplain was inundated. The section of the road north of the river was the most heavily used, mostly by traders from Santiago. Colonization of the southern 'frontier' Within the central and southern zones there was l i t t l e change in the market system. The railroad s t i l l served as the main means of inter-regional transportation south of the San Juan River, and the main flow of trade continued toward the industrialized areas of central Mexico. However, in the decade from 19$0 to I960 the colonization of the interior of the municipio of Playa Vicente and the subsequent expansion of the area under cultivation contributed to the growth of Vi l l a Isla and Juanita as significant regional commercial centres (Fig. 8b). Initially the sole means of access to the colonies in the central part of municipio Playa Vicente was by dirt road, or brecha, from V i l l a Isla to Abasolo del Valle, with another path from Juanita 13 to the resettlement zone along the Rio de la Lana. J Dense forest and deeply dissected terrain inhibited the development of communications between the new settlements and the pueblo of Playa Vicente. As a result the fi r s t trading links to be established were with merchants from Vil l a Isla and Juanita to the north. 69 Comerciantes from these centres entered the newly settled areas on horseback with supplies of merchandise, and purchased surplus crops, mainly corn and sesame seed and some ri c e . Prom V i l l a I s l a most of the corn was shipped by r a i l to central Veracruz, while sesame was sold on contract to the o i l pressing plant E l Faro i n Cordoba. With the establishment of vertical trade links between the commercial centres along the railroad and the newly formed colonies, the dendritic network merely branched further out into the rural areas (Pig. 8b). The colonists, reliant on the services of these two or three comerciantes and lacking resources or knowledge of market outlets, were not i n a position to determine the terms of trade. Between 195>0 and i960 the only notable improvement i n the transportation network i n the southern zone was the widening and gravel surfacing of the road between Playa Vicente and V i l l a Azueta (Pig. 6). This project was undertaken by Petroleos Mexicanos who retained the mineral rights to lands sold to the colonists. This development did not alter the pattern or organization of the market sustem. On the contrary i t strengthened the position of comerciantes i n Playa Vicente enabling them to transport goods to and from V i l l a Azueta more ef f i c i e n t l y . Towards the end of the decade, Abasolo del Valle and Neuvo Ixcatlan, the largest of the colonies i n the centre of the municipio 70 and along the Rio de l a Lana respectively, "began to develop as independent commercial centres causing a decline i n the fortunes of merchants from V i l l a I s l a and Juanita (Fig. 10a). Traders from within the colonies began importing merchandise directly from Cordoba and Veracruz and purchasing surplus production from other colonists themselves. These traders gradually expanded their sphere of influence to surrounding conimunities, thereby working i n competi-tion with the merchants from outside the area and severely reducing their volume of trade. The only access to the settlements on the northern slopes of the Tuxtlas was by a narrow road from Catemaco to the village of Sontecomapan. From here i t was necessary to travel on horseback, or else by boat along the coast. Few outside traders entered this area, giving comerciantes i n Sontecomapan a monopoly over local trade. Network changes from i960 to 1970 In 1968 the road inland from Santiago Tuxtla to V i l l a I s l a was paved and a bridge constructed across the Rio San Juan. Although the bridge was destroyed the following year due to heavy flooding, and to date has not been replaced, a cable ferry was put i n service. Most products entering V i l l a I s l a from the colonias to the south and from ejidos i n municipio I s l a were trucked out along the new road to Santiago, and then north or east along the coastal 71 highway. Other crops destined for markets i n central Veracruz continued to he transported by r a i l (Pig. 10a). Apart from the re-orientation of trade flows, the improved access to this zone resulted i n a higher level of competition from outside buyers, particularly from traders based i n the municipio of Santiago Tuxtla, weakening the position of comerciantes i n Isl a . However, from local accounts i t would appear that the poor condition of the road from V i l l a I s l a to the colonia of Abasolo del Valle deterred outside buyers from entering this zone. Also by this time the comerciantes i n Abasolo del Valle and Nuevo Ixcatlan had become well established i n their multifunctional roles within the communities. With credit i n short supply, many of the colonists were indebted to the local comerciantes and under obligation to turn over their crops to them. Meanwhile, the condition of the road between V i l l a I s l a and Rodriguez Clara was such as to prohibit the passage of large trucks between these two towns. According to local allegations, monies from the state and federal governments were made available for the improvement of the road surface, but comerciantes i n Rodriguez Clara, anxious to protect their interests from outside competition, ensured that the funds were diverted to other uses. Dependence on the railroad to transport goods i n and out of the area helped to preserve local monopolies and the dendritic structure of commerce. FIGURE 10 - Development of market network (a) 1960-70 (t>) Post 1970 73 In summary, the changes wrought i n market system i n the Tuxtla region through the impact of the new highway after 1950 were largely restricted to that zone. Throughout the rest of the f i e l d area the dendritic structure remained intact and was further strengthened "by the expansion of settlement into the frontier areas (Fig. 10a). The contemporary market system: Post 1970 Between 1970 and 1975 two major highways were constructed through the central and southern zones respectively (Fig. 7). In 1972, the road from Tuxtepec south to Palomares was completed. This road, which crosses the Rio Playa Vicente seven kilometres south of the town of Playa Vicente and the Rio de l a Lana east of Tatahuicapa, joins the Transisthmian Highway thus providing access to markets "both north and south of the area (Fig. 6). Meanwhile a second highway through the central zone was s t i l l under construction at the time f i e l d work was being undertaken. This highway parallels the railroad, running from Loma Bonita through Tesechoacan to Sayula, which i s located just south of Acayucan on the Transisthmian Highway. Although the highway was s t i l l unsurfaced i n 1975» t r a f f i c along the road was heavy. It i s anticipated this road w i l l soon replace the narrow twisting coastal highway as the primary transportation route through southern Veracruz. Trucking has now replaced r a i l transport and most of the trade Ik flows have "been re-oriented along the highways as indicated i n Figure 10b. A number of feeder roads have been opened to connect villages with the highways, although few of these have been given an all-weather surface. Despite the impact on the spatial network of trade flows, which now assumes a more linear pattern, the changes i n the overall market system are greater i n the central zone than i n the southern zone where the dendritic network persists i n spite of the existence of the highway (Fig. 10b). This contrast i s directly related to changing patterns of land use: while agricul-tural production has increased dramatically i n the central zone since 1965» making the area attractive to outside buyers, that of the southern zone has declined as many of the farmers are converting arable land into permanent pasture."^ Central zone On three of the e.jidos visited i n the municipio of Rodriguez Clara the total area under cultivation has increased between 100 and 500 percent (Table I ) . With credit from the Banco E.jidal these peasants have successfully planted the r o l l i n g lomas, formerly used as pasture land, by using f e r t i l i z e r s and more modern agricultural techniques. Yields of three to four tons per hectare of corn are now common. E.iiditarios are being encouraged by the credit bank to form small groups or societies of ten or more individuals and to farm their land collectively, and to market their produce i n the same manner. 75 TABLE I Increases i n the area under cultivation i n municipio of Rodriguez Clara* Total he ctarage Number of hectares cultivated i n 1965 Number of hectares cultivated i n 1975 E l Blanco 3000 1000 2000 Nopalapan 8000 1 0 U 0 5000 Casas Yiejas 1200 80 300 *Source: F i e l d work 1975 The combination of a high volume of production and improved communications attracts a large number of outside buyers to this area. Several e.jiditarios i n this zone claim that, i n contrast to previous years, they now s e l l to non-local buyers, gente de afuera, many of whom drive straight to the village to buy. unfortunately i t was not possible to ascertain whether these buyers are independent truckers or employees of urban based wholesale firms, although I was told that i n 1971+ buyers for the large corn m i l l and t o r t i l l a factory at Chinameca near Minatitlan bought a considerable portion of the corn harvested on the e.jido of Nopalapan. Although many of the e.iiditarios interviewed i n this zone claimed to s e l l most of their harvest to outside buyers, other informants from Rodriguez Clara stated that during the peak harvest period many non-local truckers p u l l off the highway into the town of Rodriguez Clara (only one kilometre to the south). These buyers 76 do not drive to the source of production hut rather choose to deal with one of the local 'coyotes', small scale independent traders who have already hulked several tons. This system offers considerable advantages to the external buyer: the pickup trucks used by local traders are more suited to the rural road system. Secondly, although some farmers on the larger ejidos s e l l their harvest collectively, many ejiditarios continue to farm individually; the purchasing of small quantities from these producers i s a time consuming process. The high costs involved i n dealing with numerous small-scale producers, particularly to a buyer unfamiliar with the area, outweigh the economies of scale achieved through bulk buying. In summary, the construction of the new highway has improved access to this zone resulting i n the penetration of the area by outside buyers. Competition from these buyers has altered the structure of the market system by undermining the former monopoly of comerciantes i n Rodriguez Clara, although i t has only led to a partia l rationalization of the market system. While some urban based traders now deal directly with producers, others prefer to buy from local small scale traders. Southern zone In the municipio of Playa Vicente, the existence of the new highway has had a certain impact on local marketing practices. Peasant farmers no longer take their harvested crops on horseback 77 into the pueblo of Playa Vicente to s e l l them. Now local comerciantes either drive straight to the ejido, or else where access to the village i s d i f f i c u l t , to the nearest point on the highway. In the latter instance, peasant farmers take their products on horseback down to the roadside, having previously arranged a time for the 'pick-up' . Not a l l peasant farmers deal directly with a comerciante i n Playa Vicente: many s t i l l s e l l to a village buyer, who may be an intermediary for one of the merchants i n Playa Vicente. Por example, local buyers are known to purchase a high proportion of local surpluses i n the villages of E l Paraiso and La Ceiba (Fig. 7). In both these villages, the local buyer also manages the village tienda, which i s supplied with merchandise from Playa Vicente. Despite improved communications i n the southern part of the municipio and direct access to the c i t y of Tuxtepec to the north, local trade remains largely i n the hands of merchants i n Playa Vicente. The lack of competition from outside buyers can be partly attributed to declining agricultural production i n this zone. The volume of agricultural commodities exported from the municipio has dropped steadily since 1968, with the exception of r i c e . Today only 3 n percent of the cleared land i n the municipio i s devoted to 16 arable use, while the remaining 70 percent i s sown pasture. Meanwhile the number of head of cattle exported from the municipio has risen from an annual total of 7700 i n 1968 to 12,1+2U i n 1975, reflecting the increase i n ranching i n the area. 78 The combined factors of a declining volume of production, the small scale of production and the lack of a well surfaced rural road network are probably responsible for the low level of competition from external buyers. Pew villages within the municipio reported the presence of non-local traders, and ejiditarios generally named one of the four comerciantes i n Playa Vicente as their market outlet unless they sold to a local village trader. An exception to this pattern was the village of La Victoria, situated 10 kilometres to the northeast of Playa Vicente on the opposite bank of the river (Pig. 7)» This e.jido which produces corn and pineapple appears relatively prosperous, and one or two ejiditarios have become middlemen for producers i n the area and are buying corn themselves and transporting i t by truck directly to urban wholesalers i n the town of Loma iionita. The recently opened highway between Loma .Bonita and V i l l a Azueta has considerably reduced the time and cost of transportation for these peasants, who have taken advantage of improved access to market outlets. Northern zone Although buyers from a l l over southern Mexico now enter this zone to buy foodstaples produced on the ejidos and on private farms, i t would appear from local accounts that i n general these buyers prefer to deal with local traders, or large scale farmers rather than with the small scale peasant farmer. On many of the ejidos the production of corn and beans has declined, as that of sugar cane 79 has increased. (Cane i s generally produced on a quota system and delivered directly to the sugar refineries around Lerdo de Tejada). Por example, i n the viixage 0 1 Zapoapan de Cabaiias where the volume of corn grown i s relatively low e.iiditarios s e l l their corn to a trader within the ejido, even though this community i s located right on the highway. Truckers entering the ejido buy directly from the trader. Summary In summary, the construction of the railroad at the beginning of the twentieth century provided a direct link with urban centres of demand i n central Mexico, thereby stimulating trade within this region, i n particular the 'export' of foodstaples grown on peasant holdings or ejidos. Local merchants based i n the towns along the railroad successfully monopolized r a i l transport and gained control over the inflow and outflow of commodities, and were thus able to determine the terms of trade within the region. The primitive means of transportation i n use throughout most of the area and the small scale of production contributed to the formation of a dendritic market system consisting of a hierarchy of commercial levels. Local surpluses moved upwards through this hierarchy of bulking centres towards the regional commercial centres located on the railroad. The expansion of settlement into the 'frontier' zones i n the 1950's produced an extension of the existing dendritic network. 80 Comerciantes from nearby towns included the new settlements i n their market networks, supplying the colonists with merchandise, and i n return purchasing surpluses produced on the colonias. However, as these settlements became established, the largest of the colonies developed into independent commercial centres with dendritic extensions into the immediate hinterland area. The impact of the extension of the national highway network into this peripheral region has been to provide access to a greater number of urban markets and to increase mobility within the region. The declining importance of r a i l transport i n the face of cheaper and faster transport by road has adversely affected wholesale trade i n the former regional commercial centres whose growth had been based on their proximity to the railroad. With the shift to truck-ing many traders now by-pass these centres altogether, thereby undermining the former monopoly on trade held by comerciantes based i n these towns. The lower level of capital resources required to move products by road has enabled small scale traders from within the area to operate independently and to deal directly with whole-salers from outside the region. Improved communications have also encouraged the penetration of the area by •external' or non-local buyers, thereby raising the level of competition i n marketing. Throughout much of the area then the dendritic market structure that characterized marketing during the f i r s t half of this century i s being replaced by a more complex interlocking network of trade flows. 81 The changes i n the market network are illustrated i n Figures 8a, 8 8b, 10a and 10b. Individual market centres are linked to several higher level centres as well as to several lower level centres where communications are good. However, i t i s important to note that the dendritic structure persists i n the more inaccessible areas, and the changes i n marketing are modified by the pattern of land use. Where a high volume of production i s combined with good access, the number of outside buyers reported by peasant farmers i s high. However, the degree of competition from external buyers declines i n areas where the volume of agricultural production i s low or declining and where access remains d i f f i c u l t . In other words, while improvements i n transport and communications tend to lead to a rationalization of the market system with a reduction i n the length of the chain of intermediaries and the establishment of move direct flows between rural and urban centres, the persistence of small units of production or of a low volume of production prevents such economies of scale from being realized, thereby contributing to the maintenance of a dendritic market structure. 82 Chapter Three: Notes ^Corro, 1951, P.13« 2 Ibid, p.15. •3 ^Goods were supplied to the rural population through the hacienda store, often on credit. This mechanism was used to enslave the rural labour force through debt bondage. ^Siemens, 1961+b, p.49. ( c i t i n g Winnie, 1956 , p.236) %elgarejo, 1961, p.221. ^Ramos Cabrera, 1971, p.10. ^Parkes, i960, p.3U3. Q Ramos Cabrera, 1971, p.10. 9Wolf, 1971, P-59. ^Acaparador: l i t . one who corners the market. ^^llo. figures for the volume of production were available for this period, but local people claim that the production from the central zone was 'insignificant 1 compared to that of the Tuxtla region. 1 2Appleby, 1976b, p.291. ^Following the construction of the dam 'Miguel Aleman? across the Papaloapan River at Temascal, the inhabitants of the inundated area behind the dam were resettled i n colonies along the Rio de l a Lana. The largest of those relocated communities i s that of Nuevo Ixcatlan. ^see Chapter Two. 83 'The term 'coyote' when applied to a local trader i s a derogatory-one, alluding to the wild dog or coyote who manages to enter the corn f i e l d and steal the ripening cobs of corn. The small scale trader who appears before the corn i s harvested and takes advan-tage of the limited alternatives open to the farmer to purchase the corn below the market price i s regarded as having 'stolen 1 some of the profit that should accrue to the producer. Hacienda del Estado, Municipio Playa Vicente. CHAPTER POUR THE ADAPTIVE MIDDLEMAN: CHANGES IN LOCAL MARKETING BEHAVIOUR So fax i t has been argued that changes within the local market system for the distribution of foodstaples produced by the peasant sector can be attributed to the extension and improvement of the transportation network, the organization of local production and the changing pattern of land use. The impact of the changes on the spatial organization of trade was discussed i n the previous chapter where the resulting alteration i n the pattern formed by the movement of goods, the location of exchange centres and the structure of the commercial hierarchy were outlined. Changes i n the market system, i n the spatial and structural organization of trade, reflect the aggregate decisions and actions of the individuals who participate i n the exchange of goods and services. In this chapter, I propose to examine i n closer detail the manner i n which some of the participants have adapted to the changing socioeconomic environment, specifically how improved communications, competition from external buyers and changing patterns of land use have affected the marketing behaviour of individual traders based within the research area. 8U 85 Of the twenty-three traders interviewed during the course of f i e l d work (see Appendix III), I have selected ten case studies which are presented below i n order to provide a comparison of the marketing behaviour of traders operating during the f i r s t half of the century with that of contemporary traders, and to i l l u s t r a t e the manner i n which different individuals have adapted to changing circumstances. Although the sample was not selected on a representative basis, the group does include buyers operating on widely divergent scales at different levels of the commercial hierarchy, i n different parts of the f i e l d area and over different periods of time. Marketing behaviour i n this context refers to the economic functions carried out by traders, including those of exchange (bulking and distribution), transportation, storage, as well as complementary functions such as money lending. The scale of operation the degree of specialization, the areal extent of a c t i v i t i e s , and whether trading i s a full-time of part-time activity, are a l l important attributes of marketing behaviour. With regard; to the scale of operation, the traders interviewed were generally reluctant to divulge information concerning the amount of capital invested i n the enterprise, the volume of trade handled or the level of profit gained. But the size of an individual's trading area i n which buying and selling occurs, the extent of their transportation and storage f a c i l i t i e s , and the position of the individual within the local 86 commercial hierarchy can he used as indices of scale of operation. In describing individual traders the terms mayorista and minorista are used. Mayorista generally refers to a wholesaler, i n this instance a trader who hulks and distributes commodities across the state or the nation. A minorista i s a minor buyer, a small scale trader, often self employed, who buys directly from the producer and whose market network i s considerably smaller than that of the mayorista. The term comerciante i s used to describe large scale traders for whom commerce i s the primary economic activity. The following case studies are drawn from the northern and southern zones; the f i r s t seven from the municipios of San Andres Tuxtla and Catemaco, and the remaining three from the municipio of Playa Vicente. (Fig. l l ) The southern zone i s the least accessible of the three zones comprising the f i e l d area, and prior to the colonization of the central part of the municipio, the least densely populated. In contrast, the northern zone has the most highly developed communications network; the coastal highway was completed i n 1953, and since then a number of feeder roads have been constructed to connect villages to the highway. Although a new highway running from Tuxtepec through the southern half of the municipio of Playa Vicente was opened i n 1972, there does not appear to have been the same influx of external traders as occurred i n the Tuxtla region after 1950. The difference can be attributed to the relatively low volume of production. 87 Location of traders dealing i n food staples (t) Preterm ® ller (3) M a r t i n e z @ G a r c i a (§) Hernandez (§) Charmin © Cinta Al vare z Borrameo 50) Osorios S ontecoma^arr C ova me FIGURE 11 - Base location of traders dealing i n foodstaples from within f i e l d area. 88 Although production of corn and beans i n the Tuxtlas has declined since I960, agricultural production i s s t i l l significant to the local economy and competition among buyers within the region i s high. Within the municipio of Playa Vicente, only 30 percent of the cleared land i s now devoted to agriculture, the rest having been converted to permanent pasture. The level of competition among buyers i s particularly low i n the central part of the municipio: since the settlement of the area i n the 1950's, communications have improved only marginally, and access to the colonias remains d i f f i c u l t . Traders operating before 1950: • northern zone ;l The f i r s t three traders l i s t e d i n Table I l ( i ) were engaged i n the bulking of foodstaples before 1950, when a l l grain produced i n this area was transported by r a i l from San Andres Tuxtla, which functioned as the commercial centre for the region. The market system for the bulking of foodstaples was dominated by three or four acaparadores, who not only monopolized inter-regional transportation but also financed several intermediaries within the hinterland area to purchase corn and beans from peasant farmers. Alfredo Pretelin ( l ) was one of the four main grain buyers i n the region, while John l l e r (2) and Antonio Martinez (3) worked as intermediaries, the former for Pretelin and the latter for Lopez Miranda. TABLE II ( i ) Characteristics of traders dealing i n foodstaples Name Alfredo Pretelin John H e r Antonio Martinez Julio Garcia Daniel Hernandez .ease San Andres, Tuxtla Coyame, Catemaco Catemaco Catemaco Zapoapan, Cat. Dates of Operation 1925 - 1965 lykO - 1^63 19i>3 - 1963 - 1969 - ' Market Functions: - Bulking Agrio. commodities - Distribution of Merchandise (retailing) - Money lending corn, beans Regional sales rep. for several companies inc . Corona, Purina, Harina de Veracruz Financed local farmers & intermediaries corn, beans some, not extensive corn, beans 1953 - 55 r e t a i l outlet i n La Palma corn, beana coffee, corn c h i l i peppers Extends some credit to ejiditarios i n Zapoapan Scale of Operation Mayorista Minorista Mayorista Mayorista Minorista - Buying Area - Sell ing Area - Transportation - Storage Capacity Tuxtla region Cordoba, Puebla, Veracruz, lower Papa-loapan, Coatzalcoalcos several trucks 2 large warehouses i n San Andres Mun. Catemaco, Mecayapan & San Andres Cosamoalapan to Coatzalooaloos (Veracruz state) 1, 3 'ton truck 1 small warehoua i n Coyame Southern Mexico including local region I n i t i a l l y San Andres expanded to include Cordoba, Puebla & Southern Mexico 8, 6-10 ton trucks 2 large warehouses 1 km. from Catemaco Southern Mexico, particularly Tabasco, Chiapas and Puebla states several trucks 1 medium size warehouse Municipios of Catemaco, San Andres obffee to Ac ay ac an & Covaxubbias c h i l i to Tuxpan corn to itinerant truckers 1 small truok Small store house Self Employed Ho. of employees Full-time/Part-time Alternative oooupation self employed, & corn buyer for DDR £ mainly truckers F u l l time previously now semi-retired Pre 1950 buyer for Pretelin Post 1950 self employed. No employees Part-time - now no longer trad-ing. Agriculture, Bottling Factory Electr ioal repairs Pre 1955 interme-diary for Miranda. Post 1950 self-employed. Several employees Full-time, althougl withdrawing interest Cattle Ranching (La Palma) Self-employed hires 5 drivers Full-time Self employed and buyer for Inmeoafe no employees Part-time Agrioulture (Col. BlAguila) 90 ( l ) Alfredo Pretelin: former 1acaparador', San Andres Tuxtla Alfredo Pretelin was one of the main buyers of foodstaples i n San Andres Tuxtla between 1935 and i960 along with Lopez Miranda, Antonio Gonsalez and Camacho Aqua. As a youth Pretelin was employed i n the tobacco industry, but i n 1925 he started his own business trading i n corn and beans. By the mid 1930's his enterprise had expanded so that together with Lopez Miranda he had a virtual monopsony on grain produced within the municipio of Catemaco and a large share of the market for corn produced i n the municipios of San Andres and Santiago Tuxtla. According to Pretelin himself, the market was 'tightly organized'; he had intermediary buyers, comisionados, i n most of the major centres of production, as well as itinerant traders with pack trains of mules or horses who travelled through the more distant and inaccessible parts of the region. Within San Andres, Pretelin had two large warehouses; during the harvest season he personally bought from peasant farmers who brought their own produce into San Andres to s e l l directly to the warehouse. Pretelin supplied credit i n the form of seeds and other agricultural inputs to peasant farmers, and received a certain portion of their harvest i n return. Although Pretelin retained some corn i n storages for r e t a i l distribution i n San Andres during the period between harvests, the bulk was delivered by r a i l to wholesalers i n Cordoba, Veracruz, Puebla, and Mexico City. When the government agency, Nacional 91 Distribuidora y Reguladora was formed i n 191+1 i n an attempt to control the supply and distribution of corn, beans and wheat within the country, Pretelin was hired as a buyer for the Tuxtla region by the" government. As i n other parts of the country, this attempt on the part of the government to regulate the market and establish a minimum price only succeeded i n lowering the price paid to producers, and did not affect the profits taken by the comerciantes like Pretelin. During the 191+0's Pretelin purchased an average of 7500 tons of corn and 10,000 tons of beans per annum, which was shipped 2 out of the area to markets i n central Mexico. When the highway was bu i l t through the Tuxtlas i n 1953, Pretelin was one of the f i r s t of the local comerciantes to adopt road transport and seek new markets i n Lerdo de Tejada, Cosamoalapan, and Veracruz, a l l now accessible by road from San Andres Tuxtla (Fig. 6). Until this time Pretelin had operated on a smaller scale than Lopez Miranda, Gonsalez or Camacho Aqua, but this development provided an opportunity for expansion. Pretelin purchased three or four trucks and hired buyers to drive directly to ejidos i n the di s t r i c t to buy from individual producers or from village traders. Unlike his contemporaries, Lopez Miranda and Camacho Aqua, Pretelin was not a major importer of merchandise into the region. He was, however, the regional sales representative for 'several* companies including Corona (beer and soft drinks) and Harina de 92 •a Veracruz (flour millers). He had agencies i n V i l l a Isla, Rodriguez Clara, Juanita, Acayucan, and San Andres Tuxtla, from which the different products were distributed to surrounding rural communities. In 1965 Pretelin f i n a l l y withdrew from trading i n foodstaples. Declining local production and increasing intervention by the government i n the marketing of foodstaples were the primary reasons for his withdrawal, along with more personal reasons including his age and the death of his son who had assisted i n the running of the business. Although semi-retired, Pretelin continues to distribute products for Purina throughout the Tuxtla area. He considers there to be l i t t l e future i n trading i n agricultural commodities, and has encouraged his heirs to seek employment i n professional fi e l d s rather than i n commerce. (2) John l l e r : former intermediary buyer, Coyame John l l e r , an American who came to Mexico to join his father, was a buyer for Pretelin during the 1940's. When l l e r f i r s t came to Mexico i n 1940 he rented a small rancho on the southern shore of Lake Catemaco, on land that i s now part of the ejido La Marguerita, with the intention of cultivating bananas. After two successive years of failure due to high winds, the spread of the chamusco virus among the plants and a high incidence of malaria among his workers, l l e r moved to Coyame (Pig. 71). Here he opened a small factory bottling local mineral water. During this period he began purchasing corn and beans from ejiditarios around the lake on a 93 part-time basis for Alfredo Pretelin, delivering to the warehouse i n San Andres, for which he was received a commission. After the highway was opened, l l e r sold his interest i n the bottling plant, moved to Catemaco and began trading on a full-time basis inpartnership with Fermin Ortiz, a former itinerant buyer for Lopez Miranda.^ According to l l e r , the level of competition among small scale buyers was high. During the harvest period he drove from village to village u n t i l he had a f u l l truck load, and then drove north to Cosamoalapan, or south to Acayucan, Minatitlan or Coatzalcoalcos to s e l l to wholesalers there. By the early 1960's declining production of corn and beans together with increasing competition from 'external* buyers had reduced his volume of trade and 'drove him out of the business'.'' Before withdrawing from commerce, l l e r attempted to expand his purchasing area, driving as far north as Puebla i n search of supplies. There, as i n other parts of Veracruz state, he encountered large numbers of small scale traders merely eking out an existence, l i v i n g out of their trucks and driving from one e.jido to another to purchase corn, and moving from there to nearby towns or wherever demand existed, i n search of a wholesaler. In 1965 H e r stopped trading altogether, and now runs a small e l e c t r i c a l repair shop i n Catemaco. (3) Antonio Martinez: former intermediary buyer, Catemaco Antonio Martinez also began trading as an intermediary buyer 9k for Lopez Miranda. Martinez' family owned land i n the colonia of La Palma on the northern slopes of the Tuxtla range. During the f i r s t years of settlement, several of the colonists obtained a contract to deliver bananas to the Standard Fruit Company, a project that terminated i n disaster and bankrupted many of the farmers, including Martinez.^ To alleviate financial d i f f i c u l t i e s within the family young Martinez approached Lopez Miranda to obtain a loan with which to open a small store, or tienda, within the colonia. Martinez retailed merchandise supplied to him by Lopez Miranda, and also purchased corn and beans grown i n La Palma and i n adjacent communities. In 1955 following the opening of the highway, Martinez moved to Catemaco, and like H e r and Ortiz began to operate independently, buying and transporting loc a l l y grown corn to wholesalers i n Cordoba and Veracruz as well as se l l i n g i n San Andres. However, for reasons about which one can only speculate (since Martinez himself was not forthcoming), he was considerably more successful than the other two buyers, and today i s one of the two largest mayoristas i n Catemaco, distributing corn and beans over the whole of southern Mexico. Martinez manages his business from an office i n Catemaco, and has b u i l t two large warehouses next to the highway, one kilometre from the town. He buys from minoristas i n the area, although he himself does not buy directly from producers. His fleet of eight trucks i s 95 used to transport large shipments of corn and beans to other whole-salers i n the southern part of the country. Although i n 1975 Martinez was s t i l l known as one of the main buyers i n the d i s t r i c t , he himself claims to have been steadily withdrawing from the grain trade since 1970. This decision was based on three factors: the decline i n local production, the r i s i n g costs of transportation, and the growing centralization of the market for foodstaples. According to Martinez, the distribution of corn, beans, rice and wheat i s dominated by a few large national companies, making i t d i f f i c u l t for regional wholesalers to remain competitive. If there i s l i t t l e p rofit to be gained i n trading foodstaples, cattle ranching has become an attractive proposition. In response to the high domestic demand for beef, stocks of beef cattle have been increasing at a rate of 10.1 percent per annum i n the Veracruzan 7 portion of the Papaloapan basin. Having retained his property i n the colonia of La Palma, Martinez i s i n the process of expanding his herd, and considers his future l i e s i n farming rather than i n 8 commerce. While these three traders dif f e r i n the nature of their enterprises, scale of operation and relative success, a l l three appear to have benefitted, i n i t i a l l y from the construction of the highway through the region. Pretelin was actually the only one of 96 the former acaparadores i n San Andres Tuxtla to do so, largely as a result of the i n i t i a t i v e he took i n seeking out new markets and adopting a different means of transportation. The remaining comerciantes i n San Andres, namely Lopez Miranda and Camacho Aqua suffered a considerable loss i n trade with the opening of the market and the increase i n competition. Declining production appears to be a major factor adversely affecting these buyers today, along with increasing competition from other private buyers from outside the area and from the government marketing agency COHASUPO which has expanded i t s f a c i l i t i e s i n southern Veracruz since 1970.' Contemporary traders: northern zone Garcia (L\)» Hernandez (5), Charmin (6) and Cinta (7) are a l l contemporary traders who began buying foodstaples after the highway from Veracruz to Acayucan had been b u i l t . Garcia i s the only mayorista i n this group (see Table I l ( a i ) ) ; he i s a medium scale wholesaler who operates across the national market network trading corn and beans. With regard to scale of operation, his enterprise i s comparable with that of Pretelin, but with respect to the other characteristics his business reflects the changing marketing environment of improved communications and accessibility and a higher level of competition. Hernandez, Charmin and Cinta are a l l minoristas. buying directly from peasant producers, operating on a relatively small scale and occupying the lowest rung of the TABLE I l ( i i ) Characteristics of traders dealing i n foodstaples Name Francisco Charmin Cir i l o Cinta Antonio Alvarez Esteban Sorrameo Abundio Osorios Base Sontecomapan, Cat. Sontecomapan Cat. Playa Vicente Playa Vicente Abasolo del Valle Bates of Operation 1951 " 1965 - 1930 Francisco Alv-arez opened business 19W* - I960 Market Functions: - Bulking Agrio. commodities - Distribution of Merchandise (retailing) - Money lending corn until 1965 now fish Agricultural credit to local peasants -previously extensive corn Formerly extensivi Now furnishes agric. credit to 5 people corn, sesame and coffee General store (dry goods) in P.Vicente Distributes to rural r e t a i l outlets Mainly consumption credit Previously coffee, tobacco and corn Now only rice Previously dry goods and clothing Now has pharmacy Formerly extensive Now consumption credit (medical supplies) corn, beans, sesame General merchandise, distributor for Pena-f i e l Gasoline Extensive agricultural and consumption credit Soale of Operation Minorista Minorista MayoriBta Minorista MayoriBta - Buying Area - Selling Area - Transportation - Storage Capacity Northern part of municipio Catemaco previously corn to Catemaco. Now fish to Mexico City 1 truck small warehouse I n i t i a l l y munici-pio of Catemaco, now expanded to include a l l of S. Veracruz Veracruz, Alvarad< Cosamoalapan, recently expanded to. Coalzalcoalooi 1 truck I n i t i a l l y municipio of P.Vicente, now also R. Clara, Catemaco & N.Veracru and Oaxaca 1 Central Mexico particularly Tux-tepeo, Cordoba, 1 Mexico City 5 trucks 2 large warehouses in Playa Vioente Municipio of Playa Vicente (southern part) Tobacco to Mexico City, corn to Cordoba, rice to Tierra Blanca, Cordoba 1 truck 1 medium size warehouse Former central part of Mun. Playa Vicente. Now includes Muns. Isla & Rodriguez Clara. Cordoba, Orizaba, Puebla, Mexico City several trucks Warehouses i n Isla, Abasolo del Valle, Orizaba Self Employed No. of employees Pull-time/Part-time Alternative Occupation self employed corn trader. Buyer for fishpacker La Viga no employees Part-time Agriculture self employed no employees Full-time 3/L timi Agriculture (Ejiditario) family enterprise 10 employees, pilot truckers, clerks Full-time self employed and also buyer for rici millers La Granja 2-3 employees "(clerks) Part-time Agriculture - 70 hectares of corn and rice Self employed 10 employees, drivers and clerks Part-time now Agriculture and cattle ranching 98 commercial ladder. A l l are self-employed, although two are also contracted buyers for certain products, and their range of operation does not extend beyond the state of Veracruz. The marketing behaviour of these traders stands i n contrast of former intermediaries Ile r and Martinez i n the period before trucking replaced r a i l transport. (k) Julio Garcia; 'mayorista1 (wholesaler), Catemaco Julio Garcia i s the third largest buyer i n Catemaco today after Antonio Martinez and Carlos Rivera. A younger man than the others, Garcia only began trading i n 1963 and does not appear to share Martinez' pessimism of the current market situation. Garcia i s a successful mayorista but his marketing behaviour i s markedly different from that of Pretelin and other former comerciantes within the region. The latter attempted to maintain control over the regional market through the supply of credit to local producers and intermediary buyers. Garcia has minimal contact with local producers although during the peak harvest season he w i l l send out a truck to buy from ejidos, i n the d i s t r i c t , and has no interest i n financing local farmers. He i s concerned with the efficient and rapid distribution of supplies of corn and beans to other wholesalers across southern Mexico, particularly to the states of Chiapas, Tabasco and Puebla. He also supplies markets i n the cane growing region of central Veracruz: Cosamoalapan, Lerdo de Tejada and San 99 Francisco. During the months of March and April when foodstaples are i n short supply, Garcia imports corn and 'beans to the Tuxtla region for r e t a i l distribution. He himself i s not engaged i n re t a i l i n g , however, and i n contrast to the earlier acaparadores i s relatively specialized, dealing with only two commodities. The former acaparadores benefitted from the relative inaccessibility of the region and from their control over inter-regional transportation. Garcia on the other hand re l i e s on good communications to provide him with accurate market information, and upon a rapid transportation system. Most of his business i s con-ducted by phone from his 'office', (a chair and a desk i n the corner of his warehouse) and he prides himself on being able to meet a demand within twenty-four hours. Unlike many comerciantes who used to stockpile local supplies u n t i l the market price rose, Garcia has a rapid turnover, and rarely holds stocks for longer than eight days. His enterprise i s steadily expanding, i n contrast to that of Martinez. (5) Daniel Hernandez; village buyer, Zapoapan Hernandez buys corn on a small scale and on a'part-time basis. In 1969j when he moved to Zapoapan de Cabanas, an e.jido south of Catemaco, his main interest lay i n the coffee trade. Coffee i s widely grown at elevations over 5>00 metres i n this zone. As a private buyer, Hernandez transported the beans by truck to a processor i n Cordoba. In 1974 INMECAFE, the national coffee marketing agency was formed to regulate the supply and distribution 100 of coffee and to ensure a higher return to the producer. Hernandez was appointed as a regional 'buyer for the Catemaco d i s t r i c t and now delivers coffee to the INMECAFE heneficios (processing plants) i n Acayucan and Covarrubias. Throughout this period Hernandez, who also owns twenty-five hectares i n the adjacent colonia E l Aguila, has bought corn and c h i l i peppers from local farmers. While he transports the dried c h i l i s to a wholesaler i n Tuxpan (northern Veracruz), he rarely transports corn over any distance, preferring to s e l l to a buyer at his own door, or to a local wholesaler lik e Garcia or Martinez. Hernandez has only a pickup truck, which can easily be used to transport a commodity like c h i l i with a high value per unit volume; however, the high transport costs incurred i n delivering corn over any distance make the latter an unfeasible proposition. Hernandez generally buys corn from ejiditarios i n Zapoapan de Cabanas i n small quantities, often only a few kilos at a time, which he then dries on the floor of his storehouse, and bags for sale. During the harvest season a number of 'outside' buyers enter Zapoapan, (which i s located right beside the highway) who prefer to buy i n bulk from a trader rather than engage i n numerous transactions with individual producers. While Hernandez absorbs some of the profit that might otherwise go to the producer, he provides a local market outlet for ejiditarios who wish to obtain immediate cash for corn 1 0 1 recently harvested. Por Hernandez, who uses the INMECAFE storehouse next to his house to dry and store the grain, trading i n corn provides an additional source of income to farming and trading i n other commodities. He occasionally gives credit to local peasants, but not extensively, nor does he have any interest i n cornering the market. (6) Francisco Charmin; monopolistic 'minorista', Sontecomapan Francisco Charmin i s a buyer from Sontecomapan, a village i n the northern part of the municipio of Catemaco (Fig. l l ) . From 195*1, when he moved from Catemaco to Sontecomapan, to I960 Charmin was one of a small group of buyers who effectively controlled the market on the northern slopes of the Tuxtla h i l l s due to the relative i s o l a -tion of the area and the poverty of conrmuTucations. The village of Sontecomapan was f i r s t established i n 1907 at the head of the in l e t from the Gulf Coast. The conmiunity has since developed as a commercial and service centre for the various e.jidos and colon!as along the northern slopes of the Sierra de San Martin due to i t s central position i n the area and i t s location at the junction of several local transportation routes. From Sontecomapan boats leave for the colonia Le Perla del Golfo, and the adjacent ejido, of Zapotitlah de Flores Magon, to which there i s no overland access. A l l t r a f f i c to the communities to the northwest must pass through Sontecomapan, although beyond this point the road surface deteriorates rapidly, and beyond ejido Balzapote degenerates into 102 a mere path; the only means of access to Montepio and Ejido Revolucion i s by foot or on horseback. In 1951, when Charmin began buying corn and beans from Sontecoma-pan and the surrounding villages, the journey to Catemaco took from eight to ten hours. Apart from the distance involved, few peasants had their own means of transportation, and had l i t t l e choice but to s e l l to a buyer i n Sontecomapan. At this time the competition from 'outside* buyers was relatively low, as the majority concentrated their efforts i n the southern part of the municipio. In addition, Charmin extended credit to several ejid i t a r i o s , who were then obliged to deliver their harvested corn to him as a pre-determined price. Charmin was able to purchase corn for as l i t t l e as 00.30 to 00.35 pesos per k i l o , which he took by truck to Catemaco and sold for 00.80 pesos per k i l o . Recalling the 1950's, Charmin commented that "production was high, the competition was low, and the profits were good". Around 1965 Charmin stopped trading i n foodstaples, and began purchasing f i s h . A number of factors led to this decision: the road from Catemaco was widened and resurfaced with gravel which increased the competition from 'outside' buyers who came i n during the harvest season, and at the same time agricultural yields began to drop after years of intensive cultivation and depletion of s o i l 103 minerals. On many of the co Ioni as i n this area, cattle ranching has assumed more importance over the last decade, while i n Sontecomapan and La Barra, several e.iiditarios have turned to fishing as their main source of livelihood. Charmin i s contracted hy the f i s h -packing company, La Viga, i n Mexico City, from whom he receives a sum of purchasing capital i n addition to being paid one peso per k i l o of f i s h delivered. Charmin has two, five ton trucks, and i s supplied with cold storage tanks by the company. Local e.iiditarios claim that they receive only 50 percent of the price received by Charmin i n Mexico City. Charmin has obviously adapted to changing market conditions with some success through shifting from one commodity to another. However, the monopoly that he and two other buyers currently enjoy may be shortlived as ejiditarios within Sontecomapan are planning to form a marketing cooperative i n order to bypass these middlemen. The Banco E j i d a l has agreed to provide a loan to cover the i n i t i a l overhead investment including transportation, storage f a c i l i t i e s and equipment, i f the group can obtain a contract to s e l l to a reliable fishpacking company. (7) C i r i l o Cinta: peasant middleman, Sontecomapan C i r i l o Cinta i s a minorista or minor buyer, who has been involved i n trading since 1965. An e.jiditario from Sontecomapan, Cinta occupies a position at the lowest level of the commercial hierarchy. Like I l e r and Ortiz i n their time, he buys directly from 101+ other e.iiditarios, driving from house to house to buy from individual farmers, although occasionally he deals with a village trader, although i n his own words, "such a practice i s not economical". Cinta with his father and brother began buying corn i n 1965, shortly after Charmin began to withdraw from the market, although Cinta claims that by this time the level of competition from traders based i n Catemaco had risen markedly. With two trucks, the three members of the Cinta family purchased an average of 100 sacks or 10 tons per day during the harvest from Sontecomapan and the surrounding communities of Dos Amates, Coscuapan, Balzapote, La Palma and Montepio, which they then delivered to wholesalers i n Cosamoalapan, Alvarado and Veracruz. In 1972 Cinta 1s father and brother were k i l l e d i n a car accident, and he now operates singlehanded with only one truck. During the harvest he purchases an average six tons per day from e.jidos surrounding and including Sontecomapan. The decline i n agricultural production i s now forcing him to go further a f i e l d i n search of supplies. He may buy corn as far north as Veracruz, and then drive south to Minatitlan or Coatzalcoalcos i n search of a buyer. He rarely sells to a local mayorista as he can usually obtain a better price from an urban wholesaler. I f Cinta i s contracted to any wholesaler he declined to say so, and appears to s e l l to a variety of buyers i n a number of centres. io5 As a full-time trader, most of his time i s spent 'on the road' and he has l i t t l e time to devote to agriculture. He r e l i e s heavily on his wife's assistance i n cultivating the two to three hectares of his e.jidal plot to meet their subsistence needs. He cannot afford to hire an assistant driver. During the late 1960's Cinta extended credit to several e.jiditarios i n Sontecomapan. However, recently peasant farmers have begun se l l i n g to 'outside' buyers who offered a sli g h t l y higher price than a local middleman, and repaying Cinta i n cash rather than with crops, or else defaulting on payments altogether. Cinta now only gives credit to five e.jiditarios whom he considers to be 'trustworthy', and on whom he can rely to deliver a portion of their harvested crops to him. There does appear to be a growing reluctance among middlemen to give credit to peasant farmers, but i n the meantime the amount of credit extended by the government has increased: i n 1975 twenty-two of the sixty-five ejiditarios i n Sontecomapan formed a single sociedad i n order to receive credit from the Banco E j i d a l . Cinta originally began trading as a means of supplementing the income he gained from agriculture. His overhead investment i s low; he has only one seven^ton truck and no storage f a c i l i t i e s . His enterprise provides a steady income, but his business i s not expanding. He has no employees and re l i e s on his family's labour to manage his ejidal plot. Although the f i s h market offers a higher profit than 106 trading i n foodstaples, Cinta prefers to continue dealing i n corn, which he regards as less risky, as the market for corn i s more stable and the product i s not perisable over the short term. Small scaie buyers like Cinta have a limited inventory, and lack the necessary storage f a c i l i t i e s i n which to stockpile supplies. However, Cinta has a cooperative agreement with Hernandez: i f either man receives: more corn that he can transport or s e l l , he w i l l pass i t to the other at the price he paid for i t . In this way neither passes an opportunity to buy and each i s assured of a more stable income. These men also cooperate i n the exchange of market information. Contemporary traders: southern zone Alavarez (7), Borrameo (8) and Osorios (9) are traders from the municipio of Playa Vicente. Alavarez and Borrameo are based within the pueblo of Playa Vicente, while Osorios i s a comerciante i n the colonia of Abasolo del Valle (Pig. 11). In spite of the new highway running through the southern part of the municipio. the level of competition from external traders i s relatively low compared to that of the Tuxtla region due to the low level of agricultural production within this zone, and the poorly developed conmrunications within the municipio. A l l three traders operate on a relatively large scale. With respect to the level of capital investment and size of operation, 107 Alvarez and Osorios are on a similar level to Garcia and Martinez. The contrast between their marketing behaviour and that of the lat ter two i s a ref lect ion of the different socioeconomic environments i n which they operate. Osorios i s a trader operating i n one of the least accessible parts of the f i e l d area, and his marketing behaviour more closely approximates that of Pretel in and the other acaparadores operating i n the Tuxtla region i n the ear l ier half of the century than that of the contemporary comerciantes from that area. Borrameo operates on a small scale that the other two (see Table I l ( i i ) ) . Although the traders i n th is area are not faced with a high level of competition from outside buyers, the recent decline i n the production of foodstaples has forced them to adapt their marketing behaviour accordingly. (8) Antonio Alvarez: regional 'comerciante'. Playa Vicente The Alvarez family have been engaged i n trading since the 1930's. Francisco Alvarez opened one of the f i r s t r e t a i l outlets i n Playa Vicente when the pueblo was l i t t l e more than a large v i l lage . He was supplied with general merchandise by Casa Penagos, a whole-sale distr ibutor i n Cordoba. Alvarez also purchased corn, beans and r ice from local farmers along with two or three other buyers i n Playa Vicente. By the 19'+0fs Alvarez i s reputed to have cornered the largest share of the market, operating i n a similar fashion to the acaparadores i n San Andres Tuxtla, although on a somewhat smaller 108 scale owing to the lower volume of production i n this zone. Peasants from nearby villages brought their produce into town on horseback to s e l l , while foodstaples grown i n the more distant villages along the upper reaches of the Rio Manso and Rio de l a Lana were generally bulked by an intermediary who then transported the crops to Playa Vicente. The high cost and d i f f i c u l t y of transporting crops from Playa Vicente to markets i n central Mexico restricted smaller buyers within the area from operating beyond the boundaries of the municipio. permitting a small group of comerciantes to monopolize .trade and dominate the local market system. Following the construction of the highway, Alvarez began send-ing trucks out to the ejidos, or to the nearest point along the highway, to collect products. Peasant farmers, once their crop i s harvested, w i l l take the bus into town to negotiate with Alvarez or another buyer, and arrange to transport their crops down the side of the road where they can be picked up. Few peasants continue to bring their crops into the town. Antonio Alvarez (who now runs the business while his father i s retired) continues to operate the Tienda de Abarrotes, one of the largest general stores i n Playa Vicente supplying both the town population and a number of rural r e t a i l outlets throughout the municipio. He i s also the regional distributor for Penafiel bottled beer and soft drinks. While Alvarez continues to buy local corn and 109 sesame, he has expanded his purchasing area to include the municipios of Catemaco and Rodriguez Clara, partly to compensate for declining production i n Playa Vicente, and partly i n response to the improved communications network between the interior and coastal regions. During the dry season from March to May when there i s a shortage of corn within the municipio, Alvarez sends trucks to buy corn from 9 the irrigated lands of northern Veracruz for local distribution. Alvarez also has recently begun to buy coffee, most of which i s produced on the lower slopes of the Sierra Madre along the Veracruz-Oaxaca border and i n the southern part of the state of Oaxaca. In the 1 9 3 ° ' 8 and ^l+O's eight to ten itinerant traders with pack trains of up to thir t y mules each were responsible for much of the bulking of coffee grown i n this area. The beans were generally shipped down river to V i l l a Azueta and then by r a i l for delivery to export companies i n Cordoba, Jalapa and Mexico City. Today Alvarez uses a small plane to reach these isolated communities. He has one p i l o t employed f u l l time who deals with intermediaries i n a number of villages between Playa Vicente and Mitla, Oaxaca. Alvarez supplies these village buyers with merchandise, usually on credit, and i n return receives coffee. Because few roads penetrate the southern slopes of the Sierra Madre, competition comes mainly from large scale buyers from Jalapa who also send planes into the area to buy from these highland communities. 110 In comparing Alvarez with contemporary traders i n the Tuxtla region, i t appears that he has been able to retain a greater degree of control over local commerce, and that while he has taken advan-tage of modern means of transportation to expand his trading area, his marketing behaviour i s more 'traditional' i n that he involves i n two-way vertical trade (bulking and distribution) and continues to exert a degree of monopoly over the local network. Alvarez claims that he has ceased from providing credit to local peasants since many of them are now receiving credit from the government.3"0 However, local peasants i n s i s t that while he does not furnish credit to the same extent that his father did i n previous decades, Alvarez continues to supply agricultural and consumption credit albeit on a diminished scale. (9) Esteban Borrameo: part-time trader, Playa Vicente Borrameo has been engaged i n commerce since the early 19Un's. Born i n Tatahuicapa, a village on the Rio de l a Lana, he operated a small coffee beneficio, buying, shelling and drying local coffee, for sale mainly to itinerant traders. In 191+4 he moved to the pueblo of Playa Vicente, and has since been involved i n the bulking and distribution of a variety of products, although operating on a smaller scale than Alvarez. Upon f i r s t moving to Playa Vicente, Borrameo began buying tobacco for the Compania E l Aguiia i n Mexico City."1"1 During the I l l J.9b u ' s and 1960's Borrameo purchased corn and beans, but since 19^5 has shifted to dealing i n rice alone. He i s contracted as an intermediary to buy for the company of La Granja. and delivers rice to their mills i n Tierra Blanca and Cordoba. The company provides Borrameo with sacks and pays him on a commission basis. He also 12 r e t a i l s the packaged milled r i c e . Trading i n foodstaples i s only a part-time activity for Borrameo, and a means of supplementing income gained from r e t a i l distribution and agriculture. During the time he has lived i n Playa Vicente Borrameo has operated a general store (dry goods), a clothing store, and currently owns a pharmacy. He also has seventy hectares of land producing corn and r i c e . By diversifying his investments he reduces the risks associated with concentrating on a single economic activity. Although he i s one of the main buyers within the pueblo, Borrameo deals on a relatively small scale and buys only from within the municipio of Playa Vicente. E.iiditarios may deliver directly to his warehouse, or he may send a truck out to the various communities. Borrameo prefers to buy from individual farmers wherever possible, rather than from an intermediary. Most of the rice from this area i s grown on the floodplains of the Rio Playa Vicente and Rio de l a Lana, which are more accessible than the upland interior of the municipio. Borrameo gives credit to local producers, although to a lesser 112 extent than i n previous years. Like Cinta i n Sontecomapan, he claims that after receiving credit many ejiditarios f a i l to honour their commitment to deliver a fixed portion of their harvest, instead sel l i n g to a buyer who offers a marginally higher price. (Although few external buyers enter this area, the decline i n agricultural production appears to have intensified the competition among local merchants). Much of the credit he extends i s i n the form of medecines and drugs (consumption credit) which he supplies to peasants lacking the means to make immediate payment, but who offer part of their crop as collateral. Borrameo considers the credit system to be mutually beneficial to both himself and the peasant: producer, who would otherwise be unable to obtain the medicine that he requires. The personal relationship between merchant and peasant producer i s one that continues i n the southern zone i n contrast to the Tuxtlas where mayoristas have minimal contact with producers, and where the high number of external buyers have resulted i n more anonymous trading relations i n the more accessible areas. (10) Abundio Osorios: multifunctional middleman, Abasolo del Valle Abundio Osorios i s a large scale multifunctional middleman based i n the colonia of Abasolo de Valle i n the central part of the municipio of Playa Vicente (Pig. l l ) . Abasolo functions as the commercial centre for five other smaller colonias as well as for the ejidos that border i t , Osorios has a monopoly on most of the goods 113 entering and leaving this zone, with the exception of dairy products which are bought by Nestle. The degree of control exercised by a trader, or comericante, i s directly related to the level of competition from other traders, or the access that producers have to alternative market outlets. The power that a comerciante has to determine the terms of trade i s enhanced by performing multiple functions within the community. In the Tuxtlas the development of a dendritic system resulted from the high level of control exercised by a small group of merchants over the flow of goods i n and out of the region, their monopoly over transportation and their management of the flow of credit through the market system, while improved communications have undermined the former dendritic structure i n the north, the relative inaccessibility of the central part of the municipio of Playa Vicente has helped maintain the dendritic network. The only access to this area i s an unsurfaced, deeply rutted road from V i l l a I s l a to Abasolo del Valle. Another road linking V i l l a I s l a and Playa Vicente, with a branch to Abasolo, has been i n the planning stage for several years, and although construction was begun i n 1975 only limited progress had been made by the end of the year. The journey by truck from I s l a to Abasolo takes three hours during the dry season and longer i n the rainy season when parts of the route are flooded. Ilk During the f i r s t few years of settlement, two merchants from I s l a supplied the settlers with a variety of.merchandise and purchased agricultural surpluses, taking advantage of the settlers' dependence on them to give poor terms of trade. In I960 Osorios opened the f i r s t general store within the colonia of Abasolo, s e l l i n g merchandise supplied directly from a wholesaler i n Cordoba thereby undercutting the prices of the I s l a merchants. Osorios also began buying corn and other foodstaples produced by the colonos, at f i r s t taking produce to the r a i l station i n I s l a on horseback, then later by truck, for shipment to markets i n Cordoba and Puebla. That Osorios was able to monopolize trade within Abasolo del Valle and the surrounding colonias i s partly due to the low level of competition from other buyers, and partly due to various complementary practices, including usury and p o l i t i c a l brokerage as well as 13 operating the local transportation system. Osorios extended credit i n the form of cash, seeds and merchandise at a time when colonists were attempting to develop their land with very limited capital reserves. Osorios also actively supports one of the two opposing p o l i t i c a l factions within the colonia, as a result of which he i s able to exert considerable power within the community. Osorios i s an effective socioeconomic and p o l i t i c a l broker between the local economy and society and that of the nation. H5 In recent years the production of foodstaples has declined markedly i n Abasolo del Valle as i n other parts of the municipio as a result of the shift to cattle ranching. During the winter harvest of 1974» Osorios bought only 20 tons of corn, compared to 500 tons i n i960. In response to this trend, Osorios has extended his purchasing area to include the municipios of Isl a and Rodriguez Clara where production has increased, and diversified his economic interests so as to lessen his dependence on the foodstaple trade. He has expanded the 'import' side of the business, and now supplies a large number of rural stores throughout the municipio with mer-chandise, and i s the sole distributor of gasoline within the colonia. According to local farmers, Osorios has also invested heavily i n land and cattle, and i s reputed to hold the t i t l e s to over 1500 hectares of land i n the colonias of Abasolodel Valle and La Coahuila and to own over 600 head of c a t t l e . ^ Summary The above case studies reveal that traders i n foodstaples are not a homogeneous group, and that they exhibit considerable variation i n both the nature of their enterprise and scale of operation. The main purpose of this chapter was to examine the way i n which traders from within the f i e l d area have responded to improved communications and changes i n land use. 116 The extension of the national highway network has f a c i l i t a t e d movement i n and out of the area, and led to the intrusion of large numbers of large and medium scale traders interested i n buying foodstaples, particularly com and beans. The increase i n the level of competition from these externally based traders, combined with the general decline i n the production of these crops i n both northern and southern zones of the f i e l d area, has forced local traders to alter their marketing behaviours i n order for their enterprises to survive. In order to compete with national grain distributors, regional comerciantes have become more specialized and concentrated on the bulking and distribution of one or two commodities only. In the Tuxtlas, where competition from outside buyers i s high, regional merchants are no longer able to monopolize trade or control the in-flow and out-flow of goods. Many of the former acaparadores went out of business as today success l i e s i n being able to buy and s e l l grain across the national market network and to respond quickly to regional differences i n supply and demand. Access to market information would seem to be a c r i t i c a l factor i n the v i a b i l i t y of the enterprise. There i s a marked trend towards the separation of r e t a i l i n g and bulking functions, that i s of importing and distributing manufactured items and buying local agricultural commodities for sale on the national domestic market. While some retailers 117 occasionally buy grain, none of the major grain wholesalers today are engaged i n r e t a i l distribution of merchandise, i n contrast to the former acaparadores. In comparison, the marketing behaviour of large and medium scale merchants i n the municipio of Playa Vicente more closely resembles that of merchants operating i n San Andres Tuxtla before the coastal highway was completed. The former tend to be multifunctional and occupy a more dominant position i n the local market system than do the Tuxtla wholesalers. In Abasolo del Valle, which has remained rel a t i v e l y inaccessible, one trader i s s t i l l able to monopolize the trade links between the community and national economy. Although road access to other parts of the municipio have improved since 1970, the decrease i n agricultural production i n this zone appears to discourage buyers from other areas from entering this zone. While the development of the transport and communications net-work has not been uniform across the f i e l d area, declining production of foodstaples i s common to both northern and southern zones. In order to compensate for a drop i n local supply, many traders have taken advantage of the developing road network to extend the boundaries of their market areas. Even small scale traders operating single-handed with a three ton truck are now driving throughout southern Veracruz i n search of suppliers and buyers. Large scale wholesalers i n the Tuxtla region no longer just ship grain from southern Veracruz to central Mexico, but are buying and s e l l i n g 118 corn and beans across the whole of southern Mexico from Chiapas to Nyarit. Some local buyers have moved from trading i n foodstaples to dealing i n other commodities like coffee, c h i l i peppers or f i s h . As transport costs continue to ri s e , small scale and medium scale buyers tend to prefer dealing i n products with a higher value per unit volume. One may also speculate that as the act i v i t i e s of COHASUPO (the government regulatory agency i n the distribution of foodstaples) have increased i n this area with the construction of new purchasing centres, the market for these products i s more tightly controlled and regional merchants are no longer able to purchase corn at the extremely low prices they were once able to. At least three of the traders interviewed mentioned COHASTJPO as a factor i n their decision to withdraw from the market i n foodstaples. Many of the former traders have withdrawn from the market altogether. Those who were also importers of merchandise into the region have retained their r e t a i l outlets, as this aspect of commerce continues to provide them with a steady income and a certain economic security. It i s interesting to note that three of the larger scale traders are currently investing capital gained from commerce i n land and cattle, an indication that these regional merchants see l i t t l e future i n the grain trade. Small scale traders continue to operate, not because this i s a highly profitable business, but rather because the number of alternatives open to them are limited. 119 A further change i n marketing behaviour i s the reduction i n the amount of credit extended by middlemen to peasant farmers. At one time, the extension of credit was an integral part of the market mechanism. While this practice continues i n the municipio of Playa Vicente, i n general i t i s on a much reduced scale. Unfortunately, there i s no s t a t i s t i c a l information on the flow or volume of private credit within the local economy, but there i s a general consensus among both farmers and traders that i t i s lower than i n the early half 15 of the century. ^ The amount of o f f i c i a l credit extended to peasant farmers by the rural credit banks has increased i n recent years, particularly since 1969» but i t would seem that the underlying reason for the decline i n money lending i s the increased risk to private creditors generated by a more competitive market i n which there i s no guarantee that peasant farmers w i l l repay the debt by delivering their harvest .to their creditor. 120 Chapter Four: Notes cars of corn and 200 cars of beans each year. Each r a i l car holds approximately $0 tons. As some grain was retained for local distribution this figure i s probably a conservative estimate. Pretelin only mentioned these two companies, although insisting that he was the agent for several companies. Termin began working as a buyer for Lopez Miranda i n 1923 when he was only eighteen. He travelled through the municipio of Catemaco with his pack train of four mules, purchasing corn, and taking the sacks to Lopez Miranda i n San Andres. 'iler's own words. 'This zone i s generally unsuited to banana cultivation due to the seasonal occurrence of winds of extremely high velocity. In addition, the transportation of bananas out of La Palma proved to be extremely hazardous: overland transport was out of the question so that the.bananas had to be taken i n small boats out from the shore to ships out i n the Gulf, during which a large portion of the crop perished. r Diagnostico Socioeconomicio de l a Cuenca de Papaloapan, 1973, V»9h» 'it i s interesting to note that Martinez i s not alone i n pursuing this particular alternative. Lopez Rodriguez, son of the former comericante Lopez Miranda, while retaining the r e t a i l store "Casa Miranda,'1 has effectively ceased from buying foodstaples, and has invested a large amount of his capital i n land and cattle, and i s reputed to be one of the major ganaderos, cattle ranchers, i n the region. 'Although some tonamiel corn i s grown i n this area on ejidos located along the flooftplains, the volume produced i s insufficient to meet local demand. 121 In 1968 the Banco Agropecuario opened a temporary branch i n Abasolo del Valle. In 1974 construction began on a new permanent branch in Playa Vicente, which was due to open i n November 1975• In the spring of 1975 the various credit banks serving farmers i n this area merged to form the Banco de Credito Rural del Golfo, and the new branch i f Playa Vicente w i l l be staffed mainly by those employees who have been i n Abasolo del Valle. "''between 1944 and 1950 tobacco production was quite high i n this area, but since 1950 has fa l l e n to insignificant proportions as the low quality of leaf produced i n this zone cannot compete with the high quality tobacco grown i n the Tuxtla region where climate and soils are well suited to i t s production. 12 The market price for rice i n 1975 was 02.50 pesos per k i l o . The company La Gran j a re-sells packaged, polished rice i n this zone for 09.00 pesos per k i l o . "^Transportation between Abasolo del Valle and I s l a i s provided by Osorios three days per week, using an open top truck, closed on three sides i n which up to 20 people remain standing for the three hour journey. The cost i s 010.00 pesos one way. "'"Respite legislation prohibiting the concentration of land of more than 300 hectares under single ownership, the problem of the consolidation of landholdings, or neo-latifundism, i s a common one, particularly i n the recently settled frontier regions. In many cases money i s loaned to peasants to cover land payments, but failure to repay the debt within a given time results i n the re-tention of the t i t l e by the creditor. Another common practice i s for someone to purchase the land while allowing the original settler to remain on the property. The problem of neo-latifundism i s discussed by Stavenhagen (1970, p.233)» Siemens (1964a), and Fernandez y Fernandez (1974)• "^This i s corroborated by Cook and Cook (1972) i n their research on the organization of trade i n the municipio of San Andres Tuxtla. CHAPTER FIVE SUMMARY AND CONCLUSIONS Since the turn of the century, peasant farmers i n southern Veracruz have been increasingly integrated into the national economy as producers of foodstaples for consumers i n the urban industrial sector, and as consumers of goods manufactured by the latter sector. Agrarian reform legislation and the subsequent creation of the ejido gave peasants control over the means of production as well as the right to dispose of their surpluses as they wished. During the early part of the century, when communications were even more d i f f i c u l t than today, ejiditarios i n this area were subsistence rather than commercially oriented, although with the exception of those more isolated communities the majority of peasants have always sold a portion of their harvest. As access to markets has improved producers have become more commercially oriented and many now s e l l a l l of their crop, or else retain only a small portion for their own use. Analysis of the movement of foodstaples sold by the peasant sector reveals that this part of Veracruz supplies the urban markets of central and southern Mexico, with only a limited quantity being distributed within the local area. The local economy i s relatively undiversified so that a l l manufactured items are 'imported* from the urban areas. Thus trade flows tend to be 'vertical' and the spatial 122 123 network formed by the movement of products between bulking centres i s dendritic i n character. The thesis put forward here i s that the market system i n southern Veracruz has developed i n response to a growing demand for foodstaples from the urban industrialized 'core' of Mexico and with the improvement of transportation and communication links, although at the local level the scale and nature of agricultural production have affected the organization of trade. The changes that have taken place i n the spatial and structural organization of the market system and the factors responsible for these changes have been described and analyzed i n the preceding chapters and are now summarized below. The development of the market system i n southern Veracruz; 1900-75 The basic pattern formed by the movement of products through a series of exchange centres or bulking points corresponds to that of the dendritic model developed by E.A.J. Johnson (1970) and des-cribed by C.A. Smith (1976) i n which 'markets' (or exchange centres) form a linear arrangement that i s inclusively vertical and oriented to a single point outside the agrarian region. Collecting points at different levels of the system link to several smaller places, but to only one major high level centre. Plows are direct linking levels of hierarchies but not the local systems that surround each level of the hierarchy."1" 12k The primary factors i n the development of a dendritic market system i n southern Veracruz are those of external demand emanating from the urban core and improved communications between core and periphery. The particular form of the market network results from the scale and system of rural production. During the nineteenth century, under the hacienda system, the rural economy was based on the cultivation of sugar cane, coffee, tobacco and cotton and on extensive cattle rearing. Agrarian reform resulted i n the creation of numerous small scale holdings as the communal ejidos granted to peasants were subdivided into individual parcelas or plots. The resulting agrarian economy was relatively undiversified i n character and oriented towards the production of traditional subsistence crops, namely corn, beans and r i c e . As the same time, the removal of the former land owning aristocracy, who had previously formed the regional e l i t e i n control of production and marketing permitted the development of a marketing system i n which a new merchant class occupied a dominant position as intermediaries between the urban cen-tres of demand and rural centres of production. Up u n t i l the turn of the century traders had to rely on riverine transportation. The construction of the railroad south through the state of Veracruz during the f i r s t decade of the twentieth century provided a stimulus to trade f a c i l i t a t i n g the movement of goods i n and out of the region: 12* The railroad extended through this municipio (San Andres Tuxtla) i n 1913 had the effect of greatly increasing the acreages planted to corn, beans, wheat and rice, tobacco, sugar and some cattle since surpluses cguld. be shipped by r a i l to other markets. The disjunction between this relatively efficient form of inter-regional transportation and the primitive means of intra-regional movement was instrumental i n the growth of a dendritic system. A series of commercial centres sprang up along the railroad, namely San Andres Tuxtla, Rodriguez Clara, V i l l a Isla, V i l l a Azueta, each one forming the hub of a network of trade flows. A l l trade was funnelled through these regional commercial centres and controlled largely by a small group of comerciantes who monopolized the use of the railroad, and whose sphere of influence extended well into the hinterland regions. Foodstaples produced by small scale farmers within the region were bulked by a chain of intermediaries through a hierarchy of minor commercial centres, often no more than large villages located at junctions i n the rural road system. As observed by Appleby, where local transportation has not been developed to the same level as the regional or national network, transport costs tend to consume more of the value of the product, leading to a •thickening* of the commercial hierarchy towards the lower levels as costs are spread out among a large number of participants.^ 126 The distribution of imported merchandise generally followed the same channels, and many of the regional comerciantes also functioned as intermediaries for the large wholesale companies or casas comerciales i n urban centres such as Cordoba, Orizaba, Puebla or Veracruz. The multifunctional role of these regional traders increased their power to determine the terms of trade throughout the area, often enhanced by their role as regional creditors. Peasant farmers received seeds and implements on credit, or mer-chandise from the local store with the crop as collateral. The market system was more highly organized i n the Tuxtlas than i n the central and southern zones, and the dendritic network more extensive due to the higher population and higher volume of production. This area was known as 'the granary of Veracruz' reflecting i t s importance as a major food producing region. In comparison the market networks i n the central and southern zones were less developed; much of the undulating grasslands of the San Juan Evange-l i s t a plain were devoted to cattle ranching while;large section of the southern zone as well as a strip along the Gulf coast remained unoccupied and covered i n dense forest. The arrival of waves of settlers i n search of cultivable land during the mid f i f t i e s , and the subsequent colonization of the forested interior of the municipio of Playa Vicente and of the northern slopes of the Sierra de San Martin, led to a further ex-tension of the dendritic network. Merchants based i n towns along 127 the railroad seized the opportunity to increase their volume of trade and find new outlets for their wares. However, within a few years of settlement entrepreneurs from within the larger colonias began buying local surpluses and shipping direct to urban markets while importing merchandise from central Mexico for sale to the colonists. These colonias thus became established as independent commercial centres serving surrounding rural communities and farms, reducing the volume of trade handled by merchants i n the railroad towns. Comerciantes i n the towns of V i l l a I s l a and Juanita suffered particularly from the expansion of trading enterprises i n the colonias of Abasolo del Valle and Nuevo Ixcatlan respectively. The construction of the highway southwards along the Gulf coast from Veracruz was completed as far as Catemaco by 1953» providing access to a number of new markets, particularly to towns along the coast such as Alvarado and Lerdo de Tejada to the north and Coatzalcoalcos and Minatitlan to the south. At the same time, improved communications attracted a large number of outside buyers to the area, competition from whom undermined the monopoly previously enjoyed by the regional comerciantes. Truckers from a l l over southern Mexico began entering the region during the harvest season, often bypassing the towns of Santiago 'Tuxtla and San Andres Tuxtla i n order to buy directly from small scale traders located closer to the source of production, or i n some cases from the farmers themselves. 128 Meanwhile the shift from r a i l to road transport gave small scale traders the opportunity to deal directly with urban whole-salers outside the region. Previously, small scale buyers i n the Tuxtla region were limited by the high level of capital investment required to ship goods by r a i l , and had l i t t l e choice but to s e l l to one of the comerciantes i n San Andres Tuxtla. With the advent of trucking these buyers were able to transport small quantities of one to five tons for sale i n one of the urban centres of demand along the Gulf coast or i n central Veracruz. Other sedentary buyers now had the option of se l l i n g to one of several itinerant urban-based truckers as well as to a local comerciante. However, the developments described above were restricted to the northern or Tuxtla zone. Up u n t i l the 197°'s there was l i t t l e improvement i n the transportation network i n the central and southern zones. Hail transport continued to predominate allowing regional comerciantes to retain their control over local trade as competition from external traders was limited. It i s interesting to note that despite the opening i n 1972 of a new highway from Tuxtepec to Palomares through the municipio of Playa Vicente, the dendritic network here remains largely unchanged. The inaccessibility of many rural communities combined with a low volume of production i n this zone make the area unattractive to external buyers. Although a number of feeder roads have been cut through the forest from the highway to give access to peasant communities, none 129 of these yet have an all-weather surface and are v i r t u a l l y impassable during the rainy season except to four-wheel drive vehicles. Regional traders i n Playa Vicente continue to occupy a dominant position within the local market system. Within the central zone, the construction of a new highway parallel to the railroad has altered the dendritic structure and increased the level of competition i n marketing. The high volume of production on the e.jidos i n the Bunicipio of Rodriguez Clara that has been achieved through the application of f e r t i l i z e r s to formerly uncultivated land attracts a large number of buyers to the area from a l l over southern Mexico. While some truckers go directly to the source of production to buy, others rely on the services of local 'coyotes', small scale independent traders who often have only a pickup truck, to provide them with corn that i s already bulked. Although the price may be marginally higher than that on the ejido i t s e l f , the truckers are saved the additional costs of numerous transactions i n an area where the rural road network i s unsurfaced and ejidos dispersed over a wide area. The formation of a dendritic market system i n southern Veracruz i s largely a result of 'external' demand for foodstaples from the major population centres i n central and southern Mexico. Marketing channels are organized to f a c i l i t a t e the movement of goods between rural and urban centres. The location of exchange points or bulking centres i s directly related to the transportation network. Improve-130 merits i n conmiunications have emanated from the more highly developed •core' area of the country, frequently creating a disjunction be-tween a more efficient, less costly inter-regional transportation system and a less efficient more primitive intra-regional system. The relatively higher cost of transportation per unit volume at lower levels of the commercial hierarchy tends to produce further branching of the market network as costs are spread out among a larger number of participants i n a series of minor centres. Improved transportation between core and periphery have led to the penetra-tion of the area by merchants based i n urban centres outside the region whose presence has adversely affected the business of some of the large scale traders within the region. However, external buyers appear reluctant to enter communities where the volume of production i s low or where access i s particularly d i f f i c u l t , and local traders continue to occupy a dominant position. The question remains as to how significant such changes have taken place i n the spatial and structural organization of trade actually are, and whether or not the marketing opportunities for peasant producers have increased. The impact of changes i n the market system on peasant producers Peasants interviewed within the research area considered their situation with respect to marketing opportunities to have improved 131 marginally since the construction of highways through the area. Generally i t i s easier to dispose of surpluses as the number of buyers has increased and access to their communities has improved. Whereas previously, farmers had to take their crops on horseback to the nearest town or exchange centre, now buyers come directly to the village with trucks. In the more accessible communities to which a larger number of buyers are attracted, peasant producers are able to choose between one of several buyers. E.iiditarios i n the central zone claim that they now s e l l to the highest bidder, or 'el me.jor poster'. They consider their bargaining position to have improved, particularly with the increase i n the amount of o f f i c i a l credit available. Previously, the majority of farmers received private credit from a local middle-man with the obligation to deliver their harvest to him i n return. In addition, better communications enable peasants to receive more market information than before, particularly concerning market prices and market conditions throughout the area, making them less susceptible to cheating on the part of traders. However, despite these minor changes, the organization of the market system i s such that the market opportunities for small-scale peasant farmers are limited and the price that peasants receive for their crops remains below the o f f i c i a l guaranteed minimum price set by the government marketing agency, CONASUPO. 132 P r i c e s r e c e i v e d by peasant farmers Research conducted i n the municipio of San Andres T u x t l a i n 1966 i n d i c a t e s t h a t the p r i c e s r e c e i v e d by e . i i d i t a r i o s f o r each of the f o u r main f o o d s t a p l e s were below the o f f i c i a l market p r i c e s (see Table I I I ) . TABLE I I I Market p r i c e s f o r f o o d s t a p l e s , San Andres T u x t l a * Crop Support p r i c e (guaranteed minimum) pesos per k i l o P r i c e r e c e i v e d from middleman pesos per k i l o Beans Corn 0.91+ 1.47 0.69 - 0.814 1.17 - 1.27 0 .85 - 0.90 0.79 - 0.80 R i c e 1.00 Wheat 0.91 *Source: Cook and Cook (1972) " O r g a n i z a t i o n o f Trade i n One T r o p i c a l M u n i c i p a l i t y of Veracruz, Mexico", p. 59 133 TABLE IV Average p r i c e s received f o r corn by farmers -pesos (per k i l o ) * E j i do/Colonia December 197U June 1975 October 1975 Hopalapan 1.60 _ 1.70 E l Blanco 1.60 - 1.80 Casas V i e j a s 1.60 2.20 Col.Dominguez 1.70 - 1.80 Playa Vicente 1.60 - 1.70 2.00 2.00 La V i c t o r i a 1.60 - 1.70 2.20 2.00 E l Nigromante 1.50 - 1.70 2.20 E l Arenal 1.60 - 1.70 San C r i s t o b a l .80 _ 1.00 Em. Zapata 1.50 1.50 La Ceiba 1.50 E l Tomate i . 5 o 2.00 i . 5 o San Jose 1.50 Sta. Teresa 1.50 1.75 Arroyo Sta,Maria 1.1+0 H. l i e a t l a n 1.50 - 1.80 2.00 - 2.50 Abasolo 1.50 - 1.60 La Coahuila 1.1*0 - 1.60 Eden de l a s Ploree 1.60 Lealtad Munoz 1.50 1.50 - 2.00 La P e r l a del Golfo - 2.50 Z a p o t i t l a n 1.00 Montepio 1.20 E. Bevolucion 1.20 Balzapote .90 - 1.50 Sontecomapan 1.70 - 1.80 2.00 - 2.50 1.50 Zapoapan 1.00 La V i c t o r i a . 90 - l . 5 o La Marguerita - 1.90 - 2.50 Tilapan l . U o - 1.60 2.10 Comoapan 1.50 2.00 Salto de. E. 1.50 - 1.70 Bi neon. Z. 1.60 - 1.70 2.20 La Candelaria .90 Dos Amates .914 V i s t a Hermosa 1.00 2.00 Coxcuapan 1.60 2.00 Benito Juarez 1.20 1.80 Mario Souza i . 5 o 2.U0 Juan Seco 1.30 Ojoxapan 1.60 E l Laurel 1.70 2.10 1.80 •Sources: Comisariados of e j i d o s Comite Begional Campesino, San Andres Tuxtla 134 Since 1966 the situation has remained unaltered; prices paid to peasant farmers continue to f a l l below the guaranteed minimum price. Table IV indicates the average price received for corn on ejidos and colonias within the f i e l d area during the year from 1974 "to 1975. The o f f i c i a l guaranteed price for primavera (spring sown) corn harvested between November 1974 and January 1975 was $1.74 pesos per k i l o . While the market price reached $1.80 pesos on a few ejidos, most farmers received less, and i n the more remote communities corn fetched as l i t t l e as $0.90 pesos per k i l o . The o f f i c i a l price for tonamiel corn, harvested between Apr i l and June, was $2.00 pesos per k i l o due to the general scarcity of supply at this time of year throughout the country. Local prices often rise above the guaranteed minimum during the summer months indicating consumer preference for local white corn over the imported yellow variety, but only those ejidos located on the floodplains with irr i g a t i o n water available to them are able to cultivate a second crop. In September 1975 "the market price was set at $1.70 pesos per kilo for the forthcoming harvest. The high price received on some ejidos i n October reflects the low supply at the time as the main harvest was not gathered u n t i l November of December. At the same time 'green' corn (not f u l l y ripened) entering the market tends to s e l l at a low price. Overall, prices reflect the demand and tend to 135 C o r n p r i c e s 1974-75 Average prices received per kilo(pesos) FIGURE 12 - Average prices received for corn "by local peasants during the winter harvest 197I+-75. (Source: Fieldwork 1975). 136 decline with distance from the highway, the lowest prices "being received by farmers along the northern slopes of the Tuxtla range and i n the central and southern part of the municipio of Playa Vicente (Fig. 12). Why do farmers s e l l below the guaranteed minimum? A study conducted i n three municipios i n the state of Veracruz i n 1966 indicated that at that time 72.6 percent of the e.iiditiarios interviewed sold their crops to a private buyer and only 2.9 percent sold to CONASTjpo (see Table V). 137 TABLE V Marketing Practices of Farmers i n 18 municipios i n Veracruz, 1966-7* Class of Farmer Large scale Small scale Market private - % private - % ejiditarios Do not s e l l 55.7 4.2 9.6 Private sector 35.3 88.1 72.7 Conasupo 4.5 2.9 2.9 Banco Agricola 0.9 0.0 0 . 5 Banco Ejidal 0.0 0.7 3.6 Other 1.4 2.1 4.9 Private & Conasupo 1.8 0.0 1.7 Private & B.E. 0.0 0.5 2.5 Private & Other 0.4 0.5 1.6 *Source: Estructura de Sector Agricola en Veracruz: Encuesta en 18 municipios (1969) Tattle 58, p. 132 (Appendix V) Of those peasants interviewed during the course of this research, the majority indicated that they usually sold to the private sector with the exception of those ejidos close to one of the CONASUPO reception centres. According to the regional director of CONASUPO San Andres Tuxtla, approximately 30 percent of local production i s bought by the government. However, i t i s not known what percentage of this i s delivered by ejidit a r i o s , by private farmers or by 7 intermediaries. 138 The low percentage of ejiditarios s e l l i n g to the government i n the years before 1970 can be pa r t i a l l y explained by the lack of reception centres i n the region. In i960 there were only seven ANDSA warehouses (ALmacenes Nacionales de Deposito S.A.) i n the state of Ceracruz, of which only one was located i n the southern Q portion, i n Acayucan. Since 1970 seven CONASUPO warehouses or Bodegas Rurales have been bu i l t i n rural locations within the area designated for research, six of which are actually located adjacent to ejidos, as part of the CONASUPO program to decentralize i t s operations (Fig. 7). In spite of this expansion of f a c i l i t i e s , the majority of peasants continue to s e l l to private buyers and not to the government. A number of factors appear to be responsible for this decision, including the cost and inconvenience of transporting crops to the reception centre, the various regulations imposed on sales by the government, and a general mistrust of government o f f i c i a l s on the part of peasant farmers. Lack of transportation i s one of the major obstacles facing ejiditarios , who are responsible for delivering the crop to the reception centre themselves. Those who wish to s e l l to the government must hire a grain deliverer (a driver and truck as few are able to drive themselves) to transport the corn to the warehouse, the cost of which ranges from five to fifteen centavos per k i l o depending on the distance involved. 139 In order for a seller to receive the f u l l guaranteed minimum price for his crop the grain must meet the standard CONASUPO requirements: the corn must he free of odor, have a moisture content of less than 18 percent contain not more than 2 percent impurities and be free of disease. A discount i s made on any grain that i s below standard. Much of the local corn, particularly that grown in the Tuxtla region where r a i n f a l l i s high, has a moisture content of 20 percent or more. Also many peasants are anxious to receive an early return on their harvest and cut the corn before i t i s f u l l y ripened and dried. In addition, the seller must be able to c e r t i f y that the land on which the crop was grown belongs to him and be able to provide some personal identification. In practice many peasant farmers do not hold certificates to their land; plots are often transferred, rented or even subdivided within the e.jido. Also the corn must be delivered i n new, standard size henequen sacks. These sacks are available from CONASUPO, but a deposit of #5.00 pesos per sack i s required. Payment for the goods received i s made by cheque which i s only negotiable at a branch of the Banco E j i d a l i n Loma Bonita, or of the Banco Agropecuario i n San Andres Tuxtla. Finally, the reception centres does not open u n t i l well into the harvest season, and even then opening hours are limited and may be irregular. u+o These factors combine to reduce the net price received by the farmer i f he chooses to take his crop to the CQNASTJPO reception centre. Many peasants consider i t more convenient and less risky to s e l l to a private buyer 'at the farm gate' who accepts the corn as i t i s , buys small quantities, and pays cash. Many buyers also provide both sacks and shelling equipment. Por these reasons peasant farmers are willing to s e l l for a price below the guaranteed minimum. The structure of the market system i s such that the small scale peasant farmer i s at a considerable disadvantage compared to the medium or large scale farmer. The majority of ejiditarios s e l l either to a resident buyer within the village or to one of the minoristas who drive from village to village with a small truck i n search of supplies. Large scale buyers are rarely attracted to communities where they have to engage i n numerous small scale transactions although a trucker may buy directly from a village trader who has already bulked several tons. The small scale buyer, knowing the price he can expect to receive from a wholesaler or from the CONASUPO reception centre, w i l l lower his buying price accordingly i n order to realize a profit from the transaction. Meanwhile the peasant farmer i s hampered not only by his lack of a means of transportation, which would give him access to alternative market outlets, but also by his lack of capital reserves or storage f a c i l i t i e s . He i s obliged to s e l l during the peak harvest season when supplies are plentiful and when the market price i s at i t s lowest i n order to realize a quick return for his crop, pay his debts and meet his subsistence needs. Only those few peasants who have been able to accumulate sufficient capital to purchase a small truck are able to bypass the small middlemen, and those few have often turned to trading themselves. The role of the market system i n development Development of underdevelopment The market system not only f a c i l i t a t e s the exchange of goods but also articulates the different sectors of the economy. During the twentieth century, peasants i n southern Veracruz have been increasingly integrated into the national economy as producers of foodstaples for urban markets. The peasant sector has become more commercially oriented: now most farmers s e l l a l l of their crops. Many peasants have begun cultivating other cash crops i n the hope of increasing their net returns. Although the range of crops produced i s broader, there has been limited diversification of the agrarian economy except for the establishment of some agricultural processing industries."^ Dependency on 'imports' to the region has increased, including both manufactured items and foodstuffs. Food-staples are frequently i n short supply, and have to be brought i n by local merchants from other parts of the country at a high cost to the peasant consumer. 11+2 There i s at present l i t t l e evidence to suggest that integration of the peasant sector into the national economy has benefited the farmer i n economic terms. Rural poverty persists throughout most of the region. Only one or two of the ejidos visited exhibited signs of material progress, those being the larger, ejidos, particularly Wopalapan, i n the central zone where the land i s being worked cooperatively and economies of scale are being realized. Further research i s required on the movement of capital through the market system i n order to test the hypothesis that increasing integration of the peasant sector i s leading to a transfer of resources from the periphery towards the centre, and that the profits from agriculture are being absorbed by the 'modern' sector rather tnan by the peasant sector. The persistence of small scale intermediaries The lack of change within the market system and the persistence of small scale traders within southern Veracruz despite improved communications between core and periphery presents an explanatory challenge. Contrary to traditional development theory, the strengthening of communications and commercial linkages between sectors has not led to the transformation or elimination of the traditional sector. The proliferation of small scale traders and continuation of the peasant mode of production i n agriculture indicates that the penetration and incorporation of rural areas tends to maintain rather than dissolve the 'dual* economy. 143 The state i n Mexico plays a c r i t i c a l , i f controversial, role i n the maintenance of small scale agricultural holdings. Peasant farmers are protected by the constitution which prohibits the alienation of e.jidal lands. In northeastern B r a z i l , where there i s no such legislation, high urban demand for foodstaples has led to the commercialization of the market system and subsequent con-solidation of land into large scale holdings."'"''' There has been a considerable rationalization of the market system with a reduction i n the length of the chain of intermediaries as wholesalers go directly to the farm to buy i n bulk. In southern Veracruz large scale traders find i t uneconomic to engage i n numerous small transactions and appear reluctant to deal directly with peasant producers, particularly where access roads are poor. State pro-tection of peasant holdings creates a niche for small scale traders who are will i n g to f u l f i l a v i t a l service function as intermediaries between producers and wholesalers. However, the prevalence of a large number of small scale agricultural holdings only p a r t i a l l y explains the existence of large numbers of small scale intermediaries who operate with low profit margins and with limited capital resources. The basis for the proliferation of small middlemen i n the regional market system of the valley of Oaxaca hypothesized by Cook and Diskin appears to apply i n southern Veracruz: " i f the present trend toward high unemployment and underemployment i n the urban industrial sector of the Mexican economy continues, then other things remaining equal, the depeasantization and proletarianization of the rural valley of Oaxaca population w i l l become less intense, but the volume of traders and commodities circulating through the marketing system 12 w i l l expand." The growth and expansion of the 'modern' sector of the economy i s based upon the substitution of capital for labour, and although this may increase productivity i n this sector, i t does not generate sufficient employment opportunities to absorb the growing labour force i n rural and urban areas. As a result people are forced to engage i n several occupations to make ends meet. In southern Veracruz, as i n other parts of central and south America, trading 13 provides an additional source of income for many. Most of the small scale middlemen interviewed during the course of research had at least one alternative occupation, and several traders operated on a part-time basis only. Dealing i n foodstaples remains an option as the capital requirements for entry into trading on a small scale are small; the highest requirement being the rental or purchase of a vehicle while the main input i s labour. Directions for further research The role of the middleman i n development Further research i s required on the role of the middleman as an instrument of articulation of different sectors of the national 11*5 economy. Mintz (1956, 1959, 1961*), Hart (1969) and Bauer (195U, 1971) nave stressed the useful role played by small scale intermed-iaries i n providing a low cost, efficient service. However, i t seems important to examine the role of these middlemen i n the context of the broader national market system, and their financial and functional relations with traders operating at higher levels of the commercial hierarchy. Research i n southern Veracruz indicates that while some of the medium size trading enterprises at the regional level are suffering from competition from urban based wholesalers, small scale enterprises continue to proliferate. The question to be asked, i n the light of reports of increasing centralization of the grain market, i s to what extent does the existence of a mass of small scale middlemen contribute to the survival and prosperity of a limited number of large scale wholesalers? Do policies which favour the development of the 'informal 1 sector merely preserve the existing dualistic economic structure? In examining the form and structure of the market system i n southern Veracruz, I have only dealt with what i s i n effect a sub-system of the national market system. L i t t l e information i s currently available concerning the structure of the national market system, the nature and size of enterprises operating at different levels of the commercial hierarchy, or of the linkages between each level. 1U6 Improved marketing opportunities for peasant farmers •The results of this study indicate that the existing market system constrains tne marketing opportunities for peasants. In order to ensure higher returns to those producers and a more equitable distribution of income further research should be directed towards the formation of policy alternatives which w i l l improve marketing opportunities. These might include a strengthening of government activity and extension of credit and technical assistance to farmers as well as an improvement of the services and f a c i l i t i e s of the government marketing agency. The development of peasant cooperatives offers another solution. The Mexican government i s already encourag-ing e.iiditarios to form cooperatives i n order to increase the scale of agricultural production and enable them to take advantage of more efficient marketing channels, although so far this scheme has met with limited success i n southern Veracruz. Further work i n applying cooperation i s needed, as the principles of cooperation and methods of accumulating capital that have worked i n the developed countries are not necessarily the appropriate ones for Third World countries. In conclusion, this study has indicated that there i s a growing need for the study of the manner i n which rural regions are incor-porated into the national economic system. The role of the state, of transportation and communication links and of growing urban demand for products from the rural sector are clearly important. It i s through studies such as this of southern Veracruz that these 1U7 broader research questions can be explored. 148 Chapter Five: Notes "•Smith, C.A., 1976b, p.319. 2 Cook and Cook, 1972, p.3. This was corroborated by Cook and Cook (1972, p.3) who state that "...the railroad likewise fostered domination of two or three large grain buyers who, though monopolistic, furnished credit to local farmers". +Appleby, 1976b, p.294. 'According to Cook and Cook (1972, p.33): "The railroad extended through this municipio i n 1913 had the effect of greatly increas-ing the acreages planted to corn, beans, wheat and r i c e , tobacco, sugar and some cattle since some surpluses could be shipped by r a i l to other markets". 3Cook and Cook, 1972, p.59. ^According to Jure Cejin (1970), i n the state of Aguascallentes, Mexico, during the winter of 1968-69, Conasupo bought between 20-percent and 50 percent of the total production of com, but of this, 50 percent was delivered by intermediaries and only 50 percent by producers themselves. *The seven ANDSA warehouses i n the state of Veracruz were located at Panuco, Tihuatlan, Martinez de la*Torre, Cruz Blanca, Cardel and Acayucan. At this time ANDSA had a total of 112 warehouses distributed throughout the country with a storage capacity of 3i? million tons (Fernandez y Fernandez, 1961, p.223). 'Further details concerning national policy regarding marketing and the role of the various government organs regulating the supply and distribution of foodstaples and market prices are to be found i n Fernandez y Fernandez, (1961), Reyes Osorio (1974), and Alisky (1973). 149 At the time of f i e l d work there were three pineapple canneries i n V i l l a I s l a , two cigar manufacturing companies i n San Andres Tuxtla, and one pineapple and c h i l i cannery under construction i n Rodriguez Clara. 1 2Forman and Riegelhaupt, 1970, p. 118-213. 12 Cook and Diskin, 1976, p.297. ^^Por example, i n the Bolivian Yungas where land reform i n 1952 gave peasants control over the means of production and the right to market their own produce, coffee trading has become a source of income for a wide variety of people: "During the coffee season, ...everybody, including campesinos, truck drivers, store owners and artisans buys and sells coffee .... This situation i s closely related to an occupational structure of underemployment. The small scale peasant holder, the chola store owner, the independent artisan whose work i s becoming more and more dispensable due to widespread consumption of manufactured goods, a l l of them are forced to engage i n several occupations to make ends meet. In Coroico, coffee dealing i s the obvious choice". (Muratorio, 1973). 150 SELECTED BIBLIOGRAPHY A. General References Alisky, Marvin, "CONASUPO: A Mexican Agency which makes low-income workers feel their government cares". Interamerican Economic  Affairs. Vol. 27, No. 3, (Winter 1973), P.47-59. Appleby, Gordon, "The role of urban food needs i n regional develop-ment, Puno, Peru". In Regional Analysis, Vol. 1, edited by Carol A. Smith. New York: Academic Press, 1976, p.llj.7-178. Appleby, Gordon, "Export monoculture and regional social structure i n Puno, Peru". In Regional Analysis. Vol. 2, edited by Carol A. Smith. New York: Academic Press, 1976, p.291-307. Ballesteros, Juan, Matthew, Edel and Nelson, Michael. La Colonizacion en l a Cuenca del Papaloapan: Una Evaluacion  Socioeconomica. Mexico, D.P.: Centro de Investigaciones Agrarias, 1970. Bauer, Peter T., and Yamey, B.S. "The economics of marketing reform". Journal of P o l i t i c a l Economy, Vol. 62, No. (June 1954), p. 210-233 Bauer, Peter T. Dissent on Development: Studies and Debates i n Development Economics. London: Weidenfeld and Nicolson, 1971• Boeke, J.H. Economics and Economic Policy of Dual Societies. New York: Institute of Pacific Relations, 1953* Booth, David. "Andre Gunder Prank: an introduction and appreciation". In Beyond the Sociology of Development. Edited by Ivor Oxaal, Tony Barnett and David Booth. London: Routledge and Kegan Paul, 1975, P.50-85. Brookfield, Harold C. "On one geography and a Third World". Transactions of the Institute of B r i t i s h Geographers. No. 58, (March 1973), p. 1-26. Brookfield, Harold C. "Third World development". Progress i n Human  Geography. Vol. 2, No. 1, (1978), p. 121-132. Chevalier, Francois. Land and Society i n Colonial Mexico: The Great Hacienda. Translated by Alvin Eustis. Berkeley: University of California Press, 1963. 151 Cook, Scott and Diskin, Martin, eds. Markets i n Oaxaca. Austin: University of Texas Press, 1976. Dadzie, K.K.S. "Economic development", Scientific American, Vol. 2l+3» No. 3, (September 1980), p. 59-65. Dorner, Peter. Land Reform and Economic Development. Baltimore: Penguin Books, 1972. Dos Santos, T. "The c r i s i s of development theory and the problem of dependence i n Latin America". In Underdevelopment and  Development: The Third World Today. Edited by H. Bernstein. Baltimore: Penguin Books, 1973, P« 57-80. Dow, James. "Models of middlemen: Issues concerning the economic exploitation of modern peasants". Human Organization, Vol. 32, No. 4, (1973), P. 397-406. Duran, Marco Antonio. E l Agrarismo Mexicano. Mexico: Siglo XXI, Fernandez y Fernandez, Ramon, y Acosta, Ricardo. P o l i t i c a Agricola: Ensayo sobre Normas para Mexico. Mexico D.F.: Fondo de Cultura Economica, 1961. Fernandez y Fernandez, Ramon. "The Mexican Agrarian Reform: Back-gounds, accomplishments and problems". In Agrarian Reform i n  Latin America. Edited by T. Lynn Smith. New York: Alfred A. Knopf, 1966. Fernandez y Fernandez, Ramon. Temas Agrarias. Mexico D.F.: Fondo de Cultura Economica, 1974. Forman, Shepard and Riegelhaupt, Joyce. "Market Place and Marketing System: Toward a theory of peasant economic integration". Comparative Studies i n Society and History, Vol. 12, (1970), p. 188-213. Frank, Andre G. "The development of underdevelopment". Monthly Review, Vol. 18, No. 4, (1966), p. 17-30. .. . . Capitalism and Underdevelopment i n Latin America: Historical Studies of Chile and Br a z i l . New York: Monthly Jtteview Press, 1967. 152 Franklin, S.H. "Systems of Production: Systems of Appropriation". 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New York: Random House, 1969, Johnson, E.A.J. The Organization of Space in,'JJeveloping Countries. Cambridge, Mass.: Harvard University Press, 1970. Kelley, Bonsack Klara. "Dendritic Central-Place Systems and the Regional Organization of Narajo Trading Posts". In Regional  Analysis, Vol. 1. Edited by Carol A. Smith. New York: Academic Press, 1976, p. 219-254. Leons, Madeline Barbara. "The Economic Networks of Bolivian P o l i t i c a l Brokers: Revolutionary Road to Fame and Fortune". In Peasant  Livelihood. Edited by Rhoda Halperin and James Dow. New York: St. Martin's Press, 1977, p. 102-115. Logan, M.I. "The Development process i n the less developed countries". The Australian Geographer. Vol. 12, No. 2, (September 1972), p. 146-153. 153 . Long, Norman. "Structural Dependency, Modes of Production and Economic Brokerage i n Rural Peru". In Beyond the Sociology  of Development. Edited by Ivor Oxaal, Tony Barnett and David Booth. London and Boston: Routledge and Kegan Paul, 1975, p. 253-282. Manzanilla Schaffer, Victor. "Recent developments i n Mexico's " Agrarian Reform Program". In Agrarian Reform i n Latin America. Edited by T. Lynn Smith. New York: Alfred Knopf, I 9 6 6 . Margolies, Barbara Luise. Princes of the Earth: subcultural  diversity i n a Mexican Municipality. Washington, D.C: American Anthropological Association, (Special Publication No. 2), 1975. Martinez Enciso, Alfonso. "Comercializacion, intermediarios y acaparadores de l a p r o d u c c i 6 n rural". Revista de Mexico  Afirario. Vol. 1, (1967), P. 13-22. McBride, George McCutcheon. The Land Systems of Mexico. New York: The American Geographical Society, 1923. McGee, Terence G. "Western Geography and the Third World". American Behavioural Scientist, Vol. 22, No. 1, (September/ October 1978), p. 93-114. Melgarejo Vivanco, Jose Luis. Breve Historia de Veracruz. Jalapa: Universidad Veracruzana, 1961. Mintz, Sidney W. "The Role of the Middleman i n the internal distribution system of a Caribbean Peasant Economy". Human Organization, Vol. 15, No. 2, (1956), p. 18-23. "Internal Market Systems as mechanisms of Social Articulation". In Proceedings of 1959 Annual Spring Meeting  of the American Ethnological Society. Edited by V.P. Ray. Seattle: University of Washington Press, 1959* P. 20-30. "Peasant market places and economic development i n Latin America". Graduate Center for Latin American Studies, Occasional Paper No. 1+. Vanderbilt University, Nashville, I96J4.. "A note on the definition of peasantries". Journal of Peasant Studies. Vol. 1, No. 1, (1973), P. 91-106. Montes Ledesma, Jose. " E l credito Agricola". Revista de Mexico  Agrario. Vol. 1, (1967), P. 23-3I4.. Nash, Manning. Primitive and Peasant Economic Systems. Scranton, Perm.: Chandler Publishing Company, 1366. Ortiz, Sutti. "Columbian Sural Market Organization: An Exploratory Model". Man. Vol. 2, (1967), P. 393-414. Parkes, Henry Bamford. A History of Mexico. 3*d. ed. Boston: Houghton M i f f l i n , i960. Pearse, Andrew. "Metropolis and Peasant: the expansion of the urban industrial complex and changing rural structure" In Peasants and Peasant Societies. Edited by Teodor Shanin. Baltimore: Penguin Books, 1971, P« 69-8O. Reyes Osorio, Sergio et a l . Estructura Agraria y Besarollo Agricola  en Mexico: Estudio sobre las Relaciones entre l a Tenencia y Uso  de l a Tierra y e l Besarollo Agricola de Mexico. Mexico, B.F.: Pondo de Cultura Economica, 1974. Ross, John B. The Economic System of Mexico. Stanford: California Institute of International Studies, 1971. Shanin, Teodor, ed. Peasants and Peasant Societies. Baltimore: Penguin Books, 1971. "Peasantry: Belineatiation of a sociological concept and a f i e l d of study". Peasant Studies Newsletter. Vol. 2, No. 1, (1973), p. 1-7. Reprinted from European Journal of Sociology. Vol. 12, No. (1971), P. 289-300. ^ "The Nature and Logic of the Peasant Economy; I: A Generalization". Journal of Peasant Studies. Vol. 1, No. 1, (1973), P. 63-80. — "The Nature and Logic of the Peasant Economy; II: Biversity and Change; III: Policy and Intervention". Journal of Peasant  Studies, Vol. 1, No. 2, (1973), P« 186-206. Siemens, Alfred H. "Recent Spontaneous Settlement i n southern Veracruz, Mexico: The Bevelopment of an Untidy Frontier". Occasional Papers of the Canadian Association of Geographers, B.C. Bivision, No. 6, 1964 (a). Simpson, Eyler N. The E.jido: Mexico's Way Out. Chapel H i l l : University of North Carolina Press, 1937. 155 Simpson, Lesley Byrd. Many Mexicos, Irth ed. Berkeley and Los Angeles: University of California Press, 1971. Smith, Carol A. "Regional economic systems: linking geographic models and socioeconomic problems". In Regional Analysis Vol. 1. Edited by Carol A. Smith. New York: Academic Press, (1976a), p. 3-63-"Exchange systems and the spatial distribution of E l i t e s : The organization of st r a t i f i c a t i o n i n Agrarian Societies". In Regional Analysis, Vol. 2. Edited by Carol A. Smith. New York: Academic Press, (1976b), p. 309-371*. "How marketing systems affect economic opportunity i n Agrarian Societies". In Peasant Livelihood: Studies i n  Economic Anthropology and Cultural Ecology. Edited by Rhoda Halperin and James Dow. New York: St. Martin's Press, 1977» p. II7-I46. Smith, Robert H.T. "Periodic market places and periodic marketing: review and prospect - I". Progress i n Human Geography. Vol. 3» No. k, (December 1979), p. i+71-505. Stavenhagen, Rodolfo. "Seren Erroneous Theses about Latin America". In Latin American Radicalism. Edited by Irving Louis Horowitz, Josue de Castro and John Gerassi. New York: Random House, 1969, p. 102-117. "Social aspects of Agrarian Structure i n Mexico. In Agrarian Problems and Peasant Movements i n Latin  America. Edited by R. Stavenhagen. New York: Doubleday and Company, 1970, p. 225-270. Social Classes i n Agrarian Societies. Translated by Judy Hellman. New York: Anchor Press/Doubleday and Company, 1975. Vance, James E. The Merchant's World. Eaglewood C l i f f s , N.J.: Prentice-Hall, 1970. Wallerstein, Immanuel. The Modern World System: Capitalist Agriculture and the Origins of the European World Economy i n the Sixteenth Century•. New York: Academic Press, 1974. 156 Ward, Barbara E. "Cash or Credit Crops" An examination of some implications of peasant commercial production with special reference to the multiplicity of Traders and Middlemen". Economic Development and Cultural Change, Bol. 8, No. 2, (January I960), p. IJ48-I63. Wharton, CR. Jr. "Marketing, Merchandizing and Moneylending: A note on middlemen monopsony i n Malaya". Malayan Economic  Review, Vol. 7, No. 2, (October 1962), p. 24-44. Whetten, Nathan. Rural Mexico. Chicago: The University of Chicago Press, 1948. Winnie, William W. "The Papaloapan Project: An experiment i n tropical development". Economic Geography 34, No. 3, (July 1958), p. 227-2J+8. Wolf, Eric R. "Aspects of Group Relations i n a complex society; Mexico". In Peasants and Peasant Societies. Edited by Teodor Shanin. Baltimore: Penguin Books, 1971, P« 50-68. (Reprinted from American Anthropologist, Vol. 58, No. 6, (1956), p. 1065-78). B. Government Publications Mexico, Fondo Mixto Revolvente para Estudios de Preinversion (Secretaria de Recursos Hidraulicos, Comision del Papaloapan, Nacional Pinanciera, S.A.). Diagnostico Socioeconomico de l a  Cuenca del Papaloapan. Ciudad Aleman, Veracruz, February 1973* C. Unpublished Materials Cook, Hugh L. and Theodore Cook. "Organization of trade i n one tropical municipality of Veracruz, Mexico". Land Tenure Centre. Research Paper No. 48, University of Wisconsin, September 1972. Corro, R., Octaviano. "El Canton de Cosamoalapan: Noticias de Geografia y de Historia." Printed i n Cosamoalapan, Veracruz, 1951. 157 Freeman, Donald B. "The Geography of Development and Modernization: A survey of present trends and future prospects". Department of Geography. Discussion Paper No. 22, York University, Toronto. November 1979. Gonzalez Romero, Vicente et a l . "Estructura del Sector Agricola en Veracruz: Encuestra en 18 Municipios". Informe del programa para l a evaluaci6n economica y social de l a extension agricola. Colegio de postgraduados, Escuela Nacional de Agricultura, Chapingo, Mexico, 1969. H i l l , David A. "The changing landscape of a Mexican Municipio, V i l l a Las Rosas, Chiapas". Department of Geography. Research Paper No. 91. University of Chicago, 1961+. Jure Cejin, Jose Ruben. "La Intervencion en e l mercado de Maiz de Temporal". Thesis, Escuela Nacional de Agricultura, Chapingo, Mexico, 1970. Muratorio, Blanca. "Neither Boors nor Utopians: Peasant p o l i t i c a l participation i n Bolivia". Paper prepared for the conference on Peasant Social and P o l i t i c a l Participation i n Asia and Latin America. University of B r i t i s h Columbia, February 1973« Ramos Cabrera ,, Gustavo. "Monografia. de V i l l a Isla." V i l l a I s l a , Veracruz, 1971 • Siemens, Alfred H. "The character and Recent Development of Agrarian Settlement i n Southern Veracruz, Mexico". Ph.D. Thesis, University of Wisconsin, 1961+ (b). Winnie, W.W. "The Lower Basin of the Papaloapan: Land and People". Ph.D. dissertation, University of Florida, Gainsville, 1956. 158 APPENDIX 1 FIELD METHODS I. Background Field work for this thesis was undertaken i n 1975 supported by a summer research grant from the University of B r i t i s h Columbia. The author spent sixteen weeks i n the f i e l d , from the beginning of July u n t i l the end of October, based i n the town of V i l l a Isla, Veracruz. Apart from two trips, one to Mexico City and one to'. Jalapa, made for the purpose of bibliographic research and interviews with government bureaux, the time was spent conducting interviews i n the towns of San Andres Tuxtla, Catemaco, V i l l a Isla, Rodriguez Clara and Playa Vicente, and i n surrounding rural communities, including both e.jidos and colonias (Appendix 2). The i n i t i a l purpose of the research was to study the way i n which the form, structure and function of the local market system impeded socioeconomic development i n the peasant sector, and to analyze the role played by local middlemen i n the rural economy and the mechanisms whereby the capital generated by the sale of agricultural surpluses i s siphoned off towards the urban-industrial (modern) sector of the economy. However, this topic proved to be too broad given the limited time and funds available and the lack of a f i e l d assistant or means of transportation. I had hoped to directly observe the sale of crops produced by the peasant sector 159 and the process of exchange between producer and middleman; unfortunately the four months i n the f i e l d f e l l between the two annual corn harvests which occur i n May - June and November -January, so that this proved to be impossible. In addition these four months coincided with the rainy season, during which many rural roads became impassable thereby restricting access to several communities. The high run off also led to the inundation of the iioodpiains of the San Juan and Playa Vicente-Tesechoacan Rivers so that passage across these rivers was suspended for a period of time during the month of September. Given the situation, I decided to narrow my focus to a description and analysis of the hist o r i c a l development of the market system for foodstaple crops produced by the peasant sector. This decision was made on the basis of information gathered during the f i r s t few weeks of f i e l d work which indicated that a series of changes i n both the spatial organization of the market system and i n the marketing practices of local traders had taken place since the early days of agrarian reform. I t seemed c r i t i c a l to gain an understanding of the way i n which the market system had changed and of the primary factors responsible for the change, before any attempt could be made to assess the impact of the market system on regional development. 160 I I . Methodology As the primary objective was to discover the way i n which the spatial and structural organization of trade i n local l y produced foodstaples had changed i n the period following agrarian reform, an inductive method of inquiry seemed to be the most appropriate. Information concerning the development of the market system was gathered from two main groups of participants: peasant producers and local traders. Supplementary data was obtained from a variety of people l i v i n g within the research area including private farmers and ranchers, members of local (municipio) government, representatives of state and federal governments, agricultural inspectors and managers of the rural credit banks (namely the Banco Ej i d a l and Banco Agropecuario), the director and assistants of the government marketing agency Conasupo as well as members of the community. The boundaries of the research area were extended to include the municipios of Santiago Tuxtla, San Andres Tustla, Catemaco, Rodriguez Clara, I s l a and Playa Vicente so as to be able to trace the development of market networks i n an area large enough to analyze the interplay of different variables influencing the market system. In accordance with the inductive approach, no set questionnaires were administered; instead interviews were conducted with members of each of the groups mentioned above and questions directed towards specific areas of interest. I n i t i a l plans to record a l l interviews were abandoned as the presence of a tape recorder appeared to inhibit 161 the interviewee and re s t r i c t the gathering of information. III. Data gathering: Selection procedures A. Peasant producers The peasant sector was taken to include both e.jiditarios and colonos. My intentions were to v i s i t as many communities as possible within the time available i n order to obtain a broad regional perspective on marketing practices and peasant participation i n the market system, to select villages where the production of foodstaples was significant, and to ensure that the sample included communities with varying ease of access as transportation was considered to be a c r i t i c a l factor. The selection of a sample of ejidos and colonias was not based on any rigorous sampling design, but resulted from the opportunities that arose to v i s i t particular communities. Lacking my own transportation I had to rely on public transportation (which i s very limited i n the rural areas) and the generosity of a number of o f f i c i a l s whose business took them out into the rural areas and who were willing to let me accompany them. Access to most of the villages ( l i s t e d i n Appendix 2) was gained through accompanying one of the agricultural inspectors on their rounds. Gathering of information within villages Because of the large number of communities visited, the time spent i n each was necessarily limited, ranging from two hours to two days with one or two exceptions. The length of stay was largely 162 determined by the available transportation to and from the community. Within each conmiunity I interviewed two or more representatives who appeared qualified to speak for the rest of the members. Invariably this included the Comi sari ado E.jidal or the Presidente  de l a colonia, (the elected head of the village council) and his deputy or treasurer. In some cases I chose also to interview an older member of the community considered to be both knowledgeable and responsible i n relating information. While i t would have been preferable to interview a broader sample of peasant producers, given the time limitation I assumed that those individuals elected by the community would be able to provide reasonably accurate information and would have a higher level of knowledge of socioeconomic data. I also relied on letters of introduction from the o f f i c i a l s of the municipio to the village councils to explain my presence and to allay fears concerning the nature of my research. This introduction proved invaluable i n gaining access to information and i n being granted interviews as there exists a high level of mistrust among many peasants of outsiders i n general. During interviews with peasant farmers questions were addressed to the following areas: - History of settlement of the community, origins of inhabitants, recent developments i n the community (general); - population data; - land use: Size of ejido, size of individual plots, area under cultivation, crops grown, amount of land cultivated by individual farmers, methods of production, productivity (yields per hectare); 163 - h i s t o r i c a l change i n land use; - transportation: Means of access to village, condition of route, type of transport available, time and cost of transport, access to means of transport (a v a i l a b i l i t y ) ; - credit: Sources and extent of credit to peasants, history of credit; - marketing: Percentage of harvest sold, to whom sold (village buyer, regional buyer, external buyer, Conasupo), relationship with buyer, location of exchange, sel l i n g price, time sold, general changes i n marketing practices (including problems and perceived improvements). In addition, observations were made with regard to the level of development i n the community, standard of li v i n g , modern f a c i l i t i e s , agricultural practices, transportation f a c i l i t i e s . Wherever possible, information gathered i n interviews was corroborated by other sources. B. Local Traders The identification of major traders or comerciantes, within the area proved relatively easy as these individuals are well known throughout the area. However, many of those who engage i n trading on a part-time or temporary basis are not known as 'traders' by other members of the community. The latter were identified by asking "Quien compra semi Has?", or "Who buys grain?" Twenty-three traders were interviewed from a total of forty whom I attempted to contact. The remainder either refused to grant an interview, or were unavailable at the time. Of the twenty-three the majority were reluctant to divulge much information concerning 161+ the nature of t h e i r e n t e r p r i s e o r the s c a l e of t h e i r o p e r a t i o n . The names and bases of t r a d e r s i n t e r v i e w e d are l i s t e d i n Appendix 3« The group of t r a d e r s was not s e l e c t e d on a r e p r e s e n t a t i v e b a s i s , although an attempt was made to i n t e r v i e w as many oraders as p o s s i b l e w i t h i n d i f f e r e n t p a r t s of the resea r c h area and to i n c l u d e t r a d e r s o p e r a t i n g a t v a r y i n g s c a l e s and v a r y i n g l e v e l s o f the commercial h i e r a r c h y . The s e l e c t i o n of t r a d e r s was l a r g e l y based on t h e i r a v a i l a b i l i t y and w i l l i n g n e s s t o cooperate. The sample i s bia s e d towards the l a r g e s c a l e , permanent, f u l l - t i m e t r a d e r who proved t o be more a c c e s s i b l e than the s m a l l - s c a l e , part-time t r a d e r . The l a t t e r tend t o be based i n r u r a l l o c a t i o n s dispersed throughout the area, and were t h e r e f o r e more d i f f i c u l t t o contact, p a r t i c u l a r l y as much of t h e i r time i s spent 'on the road'. During i n t e r v i e w s w i t h t r a d e r s , questions were addressed to the f o l l o w i n g areas: - H i s t o r y o f e n t e r p r i s e , l e n g t h of time i n v o l v e d i n t r a d i n g ; - area o f o p e r a t i o n , buying and s e l l i n g areas, t r a d i n g p a r t n e r s ; - market f u n c t i o n s performed: B u l k i n g , d i s t r i b u t i o n , t r a n s p o r t a t i o n , storage; - products traded; - s c a l e of operation; volume of trad e , general s i z e of e n t e r p r i s e , storage and t r a n s p o r t a t i o n f a c i l i t i e s , employer/employee; - p r o v i s i o n o f c r e d i t t o peasant producers, form of c r e d i t ; - changes i n e n t e r p r i s e , f u t u r e p r o j e c t i o n s ; - a l t e r n a t e occupations. 165 In most cases further information concerning the act i v i t i e s of these middlemen was gathered from secondary sources within the area, including peasants, other traders, local o f f i c i a l s , private farmers and other members of the public. C. Consistency of Data Given the limited time available, I was unable to pay a second v i s i t to more than a few of the villages i n the area. Likewise, traders were reluctant to grant me a second interview. The quality and quantity of information received varied considerably according to the knowledge of the informant, the time available for questioning, and his willingness to answer the questions. Individuals tended to stress different topics, and due to the informal nature of the interview this led to some inconsistency i n the amount of data gathered for each category of question. 166 APPENDIX 2 RURAL COMMUNITIES VISITED DURING FIELDWORK NAME STATUS NAME STATUS Municipio Catemaco La Perla del Golfo Colonia Zapotitlan de Flores Magon Ejido Montepio " Ejido Revolucion " Balzapote " Sontecomapan " La Palma Colonia Zapoapan de Cabanas Ejido E l Aguila Colonia La Victoria Ejido La Marguerita " Municipio San Andres Tuxtla Tilapan Ejido Comoapan " Salto de Eyipantla " Municipio Santiago Tuxtla Rincon Zapotero Ejido Municipio Rodriguez Clara Nopalapan Ejido E l Blanco " Casas Viejas " Colonia Dominguez " Municipio Isl a Garza Blanca E l Paraiso Ejido II Municipio Playa Vicente Ejido Playa Vicente Ejido La Victoria " E l Nigromante " Municipio Playa Vicente San Cristobal Ejido Emiliano Zapata " La Ceiba " E l Tomate " Santa Teresa " Arroyo Sta. Maria " Nuevo Ixcatlan Colonia Abasolo del Valle " La Coahuila " Eden de las Flores " Lealtad Murioz " 167 APPENDIX 3 LIST OP TRADERS INTERVIEWED NAME BASE DATES OP OPERATION Lopez Miranda (Lopez Rodriguez) San Andres 1921 - 1965 Camacho Aqua San Andres 1938 - 1970 *Pretelin San Andres 1925 - 1965 *Alvarez Playa Vicente 1933 -*Martinez Catemaco 1950 -Ortiz Catemaco 1928 - 1965 * I l e r Catemaco 1940 - 1965 *Borrameo Playa Vicente 1944 -Bernez Readi V. Azueta 1948 - 1958 Puchulin San Andres 1953 -*Charmin Sontecomapan 1950 -Croda V i l l a I s l a 1955 - i960 *Osorios Abasolo del Valle I960 -*Garcia Catemaco 1963 -Montesanos Santiago T. 1968 -*Cinta C. Sontecomapan 196$ -•Hernandez Zapoapan 1969 -Cinta P. Catemaco 1970 -Herrera Tilapan 1968 -Quinto Sontecomapan 1969 -Carranza La Perla del Golfo 1973 -Perez Catemaco 1972 -Santos Catemaco Perez Rodriquez Clara I960 -•Traders used as case studies i n Chapter Pour. 168 APPENDIX h AVERAGE SIZE OP EJIDAL PLOTS IN TUXTLA REGION* Municipio: Catemaco Municipio: Santiago Tuxtla Ejido ( Plot size Plot size hectares) Ejido (hectares) Zapoapan i i . 5 Cruz de Vidana 6.3 La Victoria 12.4 Arroyo Largo 11.2 Ojoxapan 6.6 Boca del Monte 8.2 La Marguerita 21.3 San Marcos 10.7 Coyame 21.3 E l Morillo 9.5 Miguel Hidalgo 3.5 Pueblo Nuevo 18.8 Los Morritos 20.5 La Pitahaya 18.5 Martinez Zapote 20.5 E l P r e t i l 12.3 Mimiagua 3.0 Rincon de Sosa 12.2 Benito Juarez 13.7 Rincon Zapotero 11.6 Gustavo Ordaz 8.5 Rincon de Lucia 12.9 Mario Souza 9.7 Salto de Agua 15.1 Tebanca 12.2 Sehualca 7.9 Sontecomapan 20. k Salto de Agua 10.1 Juan Seco 24.9 de Pio Mexacapan 12.1 Tapalapan 7.9 La Candelaria 15.8 Tibernal 10.1 Dos Amates 20.8 Tres Zapotes 6.9 La Providencia 25.0 Cinco de Mayo 12.4 Vista Hermosa lit. 2 Tlapacoyan 12.7 Coxcuapan 25.4 Capotal 13.9 Average 15.4 Average n . 5 *Source: Comite Regional Campesino, San Andres Tuxtla, Veracruz 169 APPENDIX k (cont'd) AVERAGE SIZE OP EJIDAL PLOTS IN TUXTLA REGION Municipio: San Andres Tuxtla Ejido Plot size (hectares) Ejido Plot size (hectares) Ruiz Cortinez 20.6 Playa Hermosa 18.7 Lerdo 12.3 Primero de Mayo 12.0 Buena Vista 7.3 Miltepec 6.0 Comoapan 4.1' Ranchoapan 11.1 Coyaltepec 6.3 Revolucion 16.9 Montepio 14.5 Rio de Tuxtla 14.9 Cuahtemoc 25.9 Sta. Losa Abata 12. k Chiniapan 18.9 Salto de E l Laurel 8.8 Eyipantla 10.8 Emiliano Zapata 12.2 San Juan de Franciso Madero 6.7 Gloria 25.5 Los Manantiales 24.0 Sihuapan 7.9 Los Naranjos 12.4 Soyota 7.9 Matacapan 8.3 Salina-Roca 17.8 Mazumiapan 11.2 Partida Migual Hidalgo 28.4 Tepancan 0 .2 Ohuilapan 5.5 Texalpan 6.8 Tilapan 26.8 Tulapan 11.6 Laguna Escondida 27.7 Average 13.8 I'iARKET OUTLETS POR FARMERS-IN 18 MUNICIPIOS OP VERACRUZ BASED ON 1966 - 67 SURVEY* CLASS OF PARMER Person or Institution Large scale private No. % Small scale private No. % Total private No. % Ejiditarios Total No. % No. % Does not s e l l 6153 55.7 34 4.2 6187 52V2 2034 9.6 8221 24.9 Private buyer 3897 35.3 712 88.1 4609 38.9 15414 72.7 223 60.6 Conasupo 499 4.5 23: 2.9 522 4 . 4 617 2.9 1139 3.5 Banco Agricola 102 0.9 0 0.0 102 0.9 105 0.5 207 0.6 Banco E j i d a l 6 0.0 6 0.7 12 0.1 758 3.6 770 2.3 Other 147 1.4 17 2.1 164 1.4 1035 4.9 1199 3.6 Private buyer and Conasupo 194 1.8 0 0.0 194 1.6 362 1.7 556 1.7 Private buyer and Banco Ej i d a l 0 0.0 4 0.5 4 0.0 530 2.5 534 1.6 Private buyer and others 46 0 . 4 12 1.5 58 o.5 336 1.6 394 1.2 Total who s e l l 4891 44.3 774 95.8 5665 47.8 19157 90.4 24822 75.1 TOTAL 11044 100.0 808 100.0 11852 100.0 21191 100.0 33043 100.0 *Source: Gonsalez Romero Vicente et a l . Estructura del Sector Agricola en Veracruz. Encuesta en 18 Municipios EN A, Chapingo, Mexico, I969 Table 58, p.132 

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