Sugar-Cane and Oil Palm Expansion in Guatemala and its Consequences for the Regional Economy

Corporate-owned sugar-cane and oil palm plantations in Guatemala are expanding at the expense of smallholder agriculture. Land control grabs are not only having consequences for local communities and ecosystems, but also for regional economies. The present study compares the value chains of smallholder products with those of sugar and palm oil. Primary data were collected from agricultural producers and their backward and forward sectors in the agricultural regions where the plantations are most prominent. The results show that on a regional level, sugar and palm oil generate fewer jobs in comparison to the products of small-scale agriculture, which have important forward linkages to small and medium trading and processing sectors. In addition, the wealth created by small-scale farming remains within the regions, whereas profits from the sugar and palm oil industries are being transferred out of them. Therefore, to achieve inclusive regional development, smallholder agriculture should be strengthened rather than promoting monoculture expansion.