“Peruvian agribusiness and its strategies to reduce wages and intensify work” by Omar Cavero

In times of crisis, the contradiction between capital and labor becomes more acute. The underlying dispute is not only about who assumes the risks and pays the costs of the crisis, but also about what the new terms of distribution will be once the storm passes. An example can be seen in the agroindustry. The departure of Pedro Castillo from the government and the impact of cyclone Yaku were seen by the sector’s big businessmen as an opportunity. Since the middle of last year, they began an intense campaign to position the idea that the repeal of Law 27360, known as the Chlimper Law, had severely affected their activity and that the damages generated must be repaired.

The president of AGAP, Gabriel Amaro, has been the main spokesperson for this campaign, supported by Confiep and by a radicalized Cillóniz, who does not hesitate to use adjectives and lie without control from the Lampadia website. This story has also been assumed by the Executive, as well as by the congressional majority. A first success of the aforementioned lobby was the approval, in December, of Law 31969, which grants these companies tax deductions and a reduced contribution to Essalud (6% until 2028). But they are going for more: a new Law for agricultural promotion.

The information disseminated by the agricultural unions is easy to refute. Except for the brief drop in exports in 2023, due to Cyclone Yaku, which damaged part of the harvest on the northern coast, in 2021 and 2022, with Law 31110 in force, exports grew by 16.8% and 6.4%, respectively. At the end of 2023, they also rose by 9.7%. It is clear that they are not in crisis. But the workers cannot say the same.

What is in crisis in the agro-industry are salaries

Companies have “compensated” for the increased costs brought about by the regulatory change by reducing salaries. A recent analysis by Eduardo Zegarra *1, carried out with data from the MTPE electronic payroll, shows that between 2021 and 2023 real wages fell by -29%. This drastic drop was not only due to the effect of inflation, but also due to falls in nominal wages; that is, people started to pay less from 2021 *2.

Zegarra finds that this has occurred more clearly in large companies, which account for more than 80% of employment in the agricultural system. This drop in wages is associated with the increase in intermittent contracts, the hiring of more women and young people – who receive lower wages – and the decline in union membership.

How can it be explained that, despite the fact that the workers managed to repeal Law 27360 in a sacrificial struggle that even cost the death of three workers, the situation today is worse than before? It is necessary to see what is behind the statistics. It is necessary to look at the way in which work is organized in the agroindustry. To do so, I will take the example of the workers of the province of Virú (La Libertad), based on testimonies collected directly.

The trident of labor exploitation in agribusiness

There are three instruments that large agricultural companies have been using to increase productivity, make employment precarious and keep the working masses disorganized. These three instruments, which work in combination, are production targets, priority orders and temporary breaks. Together they are a kind of “trident” used to keep workers under constant and exhausting harassment.

The Virú workers claim that, following the 2020 agricultural strike, companies have constantly increased production targets, expressed in daily tasks that must be completed. These targets are set unilaterally by the companies. According to the level of compliance, workers are classified and assigned a “priority order” (ODP). This is like a position in the queue to be called back to work.

This is where “temporary breaks” (TB) come in. Workers face the pressure of being sent to TB. Under the excuse that agricultural work has variable labor demand, companies unilaterally decide whether someone should remain working or be sent to TB for one, two or three months. During this time, no payment is received. It is up to each worker to figure out how to survive.

The background to this perverse system of work is the indiscriminate use of fixed-term contracts, especially intermittent ones. These contracts are often only for one month and are constantly subject to renewal, even for tasks that are not temporary. This is shown by the data from the 2023 electronic payroll: 93.5% of contracts are unstable, despite the fact that 73% of the average annual employment volume remains constant throughout the year. There are workers with several years of seniority with contracts of one or two months.

The indiscriminate use of fixed-term contracts and DT particularly affects pregnant women. It should be remembered that the workforce in this sector is extremely young. Most women are of childbearing age. Apparently, motherhood is seen as a problem for several companies. There are frequent complaints from pregnant workers who indicate that when the employer finds out about their pregnancy, they are immediately sent on temporary leave.

This trident of job insecurity is also useful for big agrarian capital to keep the working masses disorganized. The unionization rate in the sector is barely 2%, despite having structurally favorable conditions for union organization, such as the existence of large proletarian settlements that form highly homogeneous cities in economic terms, where the majority is dedicated to agricultural work. The threat of not renewing or being sent to DT is a strong deterrent, which is added to several other anti-union practices and the criminalization of social fighters.

Agro-exportation is the second largest export sector after mining. Its growth has been explosive. Curiously, after several decades of capitalist development, we seem to be returning to the panorama of the middle of the last century: a country dependent on mining extraction and agricultural activity. Certainly, today’s agricultural entrepreneurs are not the same as the landowners of yesterday, but they seem to be united by the same concept: sustaining their businesses with state benefits, low-cost work and total control over workers. If we talk about new regulations, then let them be to correct these perverse tendencies against society, not to accentuate them.

*1 Agrarian Bulletin Year 2, No. 13.

*2 The drop continues including the Beta bonus.