Dealing with these squatters - The Daily Reckoning
The Daily Reckoning by Bill Bonner
On This Day - 20 April 2011
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Gualfin, Argentina

We have just returned from the ranch. We'll give you a brief resume of our visit. There is not much of financial interest in it...unless you are interested in how to not make money in cattle ranching and wine growing. But life isn't all about making money. And if these Daily Reckonings had stuck to economics and investments, over the last 11 years, your editor would have gone mad years ago.

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"You have to understand," began our lawyer in Salta. "This is a political problem. It's not a legal problem. You have all the rights on your side. But you don't have all the politics on your side."

Our man was explaining how to deal with the problem of squatters. There are 20 or so families who live on our land. Most of them have been there for generations. They have no title to the land they live on, but by custom, recognized by law, they are allowed to continue raising their goats, cattle and sheep on thousands of acres of mountain wilderness.

There are only two requirements. First, they must pay us a token number of animals in 'rent.' These animals are largely unsaleable. So we usually don't bother to collect them. But without the gesture of payment, the people become squatters. And if they are allowed to squat for 20 years, they become legal owners of the property.

Second, they must respect the mutual agreements regarding water and grazing rights that have governed this area for hundreds of years. Beginning in the month of August, for example, they are only allowed to use water one day out of four. Water is scarce in the winter and spring. It must be allocated fairly.

"Whatever you do, don't try to throw them off your land - even if they don't pay. I have a client. A rich guy from Buenos Aires. He was in a similar situation. When some of his people wouldn't pay - you know, they get stirred up by the idea of 'indigenous rights'- he took them to court. Of course, he won. But that was just the beginning. One of the leftist political parties got wind of the story. They decided to make a big deal of it. They printed a newspaper that told the story, about how he threw poor women and children off his land and then burned down their houses. It was mostly lies. But it was useful politically for them. They even got Christina Kirschner to make a visit so she could be seen protecting poor people from wicked landowners.

"In the end, they caused so much trouble for him that he couldn't stand it. He had to pay off everyone - the politicians, the poor people...the lawyers. It ended up costing him a fortune.

"So don't think about trying to get rid of the people who aren't paying. Instead, just make sure you hold them to the terms of their deals with the other families up there. As long as they're respecting the rules for using water and grazing their animals on the right land, don't worry about the rent. It isn't important anyway. Just try to get along with them."

That seemed like good advice. Besides, the economics of the situation are on our side. Or they're against us, depending on the way you look at it. Life up in the mountains is so hard...so unforgiving...so unprofitable that the next generation of squatters doesn't seem to want to stay here anyway.

Of course, the same could be said for the ranch itself. It is not profitable. From what we can tell, it will never be profitable.

Here are the basic numbers. We have 500 cows spread over thousands of hectares. It is high, cold and dry. We're lucky if 50% of the cows have calves each year...many of which do not survive. And then, when they go to the market, the young animals are thin - only 120 kilograms. This give us a total income of about $30,000, with which we need to pay a staff of 6 gauchos, along with gasoline, tools, taxes, and all the other expenses of running a working ranch.

Why do we bother? Why don't we leave...along with the squatters? We're not sure...

Driving down to the ranch from Salta, we found the land greener than we'd ever seen it. After three years of drought, this year it rained.

"We got 250 milimeters of rain this year," Jorge reported. "About 4 times as much as last year."

The hills were green. The mountains were green. Cachi, the big mountain we see up the valley, was white, covered with snow. Even the desert floor itself was green.

"It's so beautiful...so spectacular," said Elizabeth as we drove up the valley. But the same water that turned everything green also made it difficult to arrive. We could not cross the river at the usual ford. We had to drive an additional half hour. Then, arriving at the farm, where there was usually a dry river bed, we found another river. Could we get across? We didn't know. But there was a track leading into the water and coming out on the other side. We put the truck in 4 wheel drive and plunged in. It took us to the other side without too much trouble.

Everybody at the ranch seemed happy. Jorge had a big smile. Maria seemed relaxed. All the gauchos too - Nathalio, Javier, Pedro, Norberto, Gustavo and Jasimiro - all seemed to be in good spirits.

At first, we attributed this era of good feelings to the backhoe. Then, we realized; it was just the rain.

"Oh, it is a great tool," said Jorge of the backhoe. "We can do things we never could do before. We've been able to clear out many of the rocks from the fields. And we've been able to put in a water pipe so the cattle out in the field won't have to walk all the way down to the river."

To give you an idea of the scale of these infrastructure improvements, the water line is 5 kilometers long. It takes water from a spring in the mountains and feeds it to the middle of the high pasture.

"Wow...you did all that with the backhoe?" We were impressed.

"No...we just cleared the track with the backhoe. We dug the trench by hand.
We wanted to save the backhoe for other things."

Sunday was a special day in the religious calendar. Palm Sunday. We celebrated it at the little church on the ranch with a priest who drove up from a town down in the valley. We are not exactly True Believers. But we never miss a good show, especially when it offers the hope of everlasting life. To tell you the truth, we'd probably settle for twenty years or so more. But if eternity is on offer, who are we to refuse it?

Arriving at the church at the appointed hour, our "palms" in hand...we found no one there, except Maria, who explained that the padre had been held up by the river.

When he finally arrived so did dozens of local people...women and children mostly. We said hello to everyone and introduced ourselves to the priest. He was a replacement padre, while the usual man was in Rome on a special training mission.

"Where do you come from," he wanted to know.

We explained that we were a family from the Irish diaspora currently living in the USA.

He seemed to be a likeable fellow...warm and agreeable. He gathered the worshippers at the front door and proceeded to give them a remarkable discourse.

In a nutshell, Jesus entered Jerusalem, his path strewn with palm fronds, in the traditional manner of welcoming a king. He must have known it was a set up. But he went along with the prophecy of Isaiah anyway, entering the town on a burro.

But then came the remarkable part...

"And here you have a family of Irish people as owners of the ranch. You are very lucky, because the Irish are very religious. Very good Catholics.

"So you can follow their example. They set a good example for you. Obey them. When they tell you to work, you should work. And help make this cattle ranch a great success."

"Where did he come from?" Edward whispered.

We found out later. Franco's Spain! He had left Spain in 1970 and had been in the valley ever since.

Perhaps we should have set him straight. We are not really Catholics; we're Episcopalians. And we're not really Irish either.

But then...who cares? This isn't really a cattle ranch either...

More to come...

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

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4 Responses to "Dealing with these squatters"

Mario Braganza

Apr 20, 2011

I agree with Radhika's comments Bill. Welcome back!!

Knowing your views on Gold, BIll, it would be interesting to have your insight on Silver ... I believe a lot of readers, me for sure, would find this of interest.

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Om Prakash Sharma

Apr 20, 2011

Interesting story. Looking forward to know the full story.This story might be leading us to a gr8 idea.

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K.Venkatraman

Apr 20, 2011

Felt cheated. After reading 'Dealing with these sqaters" What do you want to say?

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Radhika

Apr 20, 2011

So good to have you back Mr Bonner, dint realize how much I look forward to The Daily Reckoning .. absence does make the heart grow fonder :)

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