Paraguay’s President Fernando Lugo, a former Catholic bishop, advocated for his country’s rural poor. His removal on June 22 illustrates the process by which the wealthy few of one poor but resource-rich nation retain their power and why in such circumstances democracy is a chancy business. Lugo’s electoral victory in August 2008 interrupted the long reign of the conservative Colorado Party whose dominant figure, dictator Alfredo Stroessner, ruled from 1954 through 1989.

Investigative journalist Idilio Mendez Grimaldi points to “three sets of interests” – those “of the agribusiness trans-nationals and financial sector, those of the landowning oligarchy allied to transnational capital, and those of the right wing political parties – all backed by the United States.”

Lugo’s departure following congressional impeachment was so abrupt he couldn’t defend himself. Although conservative holdovers from earlier governments and rightist political groups had maneuvered against him throughout his tenure, the pace quickened from late 2011 on.

In October 2011, Paraguay’s SENAVE seed control agency refused to authorize U.S.-based Monsanto Corporation to sell its a new genetically modified (GM) cotton seed Bollgard BT. Director Miguel Lovera, viciously attacked in 2010 after SENAVE destroyed 110 acres of GM corn, cited lack of authorization from the health and environmental ministries.

Small farmers and environmental organizations protested the release of the new Monsanto seed. The tense atmosphere intensified in March 2012, when demonstrators in Asunción called upon Lugo’s government to restore land to displaced farmers, as promised.

Meanwhile, the Union of Production Associations (UGP), the main agribusiness-landowner organization, was mounting an anti-government media campaign. A close ally, the Zuccolillo industrial and media conglomerate, utilized its “ABC Color” newspaper to accuse Lovera and the health and environmental ministers of corruption and nepotism. Along the way, Monsanto announced plans to introduce another variety of GM cotton seed.

UGP director Héctor Cristaldo serves on boards of directors of several Zuccolillo companies. The Zuccalillo group is Minneapolis-based Cargill Corporation’s lead Paraguayan partner. At the time of Lugo’s removal, “ABC Color” was publicizing UGP plans for demonstrations set for June 25 demanding Lovera’s removal and easing of restrictions on all GM seeds. Tractors and other farm machinery were to have clogged highways nationwide.

But Lugo had already suffered an immobilizing blow. In Curuguaty district, in Paraguay’s east, land hungry squatters were claiming 2,000 acres they say former Stroessner associate and Colorado Party president Blas Riquelme had stolen, a tract not part of the 175,000 acres Riquelme already owns. On June 15 a Colombia-trained police force moved in on a judge’s order to remove the squatters. Sharpshooters ambushed the police, killing six of them. In the melee, 11 protesters were killed and 50 wounded.

With congressional enemies casting the incident as “malfeasance,” a pretext was created for Lugo’s impeachment. Mendez Grimaldi, however, wonders about sharpshooters placed among peasant activists and an elite police unit’s unexpected vulnerability. It was a trap, he suggests: “Only an internal sabotage within police intelligence units, with the attorney general’s complicity, explains the ambush.”

President Lugo had indeed been whisked away by powerful forces. In Paraguay, 1 percent of the population owns 77 percent of the land. Wealthy landowners, prone to anti-communist rhetoric and dedicated to military power, collaborate with international agribusiness corporations to produce and export agricultural commodities, primarily soy, cotton, corn, rice, and meat. Such exports account for 30% of the country’s GDP, which in 2010 expanded by 15 percent. Land taxation adds only 0.04% to the government’s tax income.

Landowners depend upon Monsanto and Cargill Corporation, or their affiliates, for seeds, fertilizers, pesticides, and for processing and marketing of their products. Paraguay is the world’s fourth largest soy exporter, which in 2010 made up 55.3% of its export income. Most Paraguayan soy ends up in Europe as biodiesel and cattle feed. Monsanto’s soy operations in Paraguay produce $30 million in tax-free annual income from royalties on GM seeds and tens of millions more from seed sales. Cargill controls 40% of soy production there.

Rubén Candia Amarilla replaced an interior minister removed following the June 15 shoot-out. Earlier, as attorney general, he had sought to criminalize social movements and, according to Mendez Grimaldi, promoted large-scale agricultural operations by using strong-arm tactics to expel small farmers from land. He’s known too for having promoted United States Information Agency influence within Paraguay’s government.

Paraguay’s agricultural capacities, the wealth it brings to U.S. corporations, its proximity to regional power Brazil, even its huge Guarani aquifer, have long entered into U.S. strategic calculations. The U.S. government maintains a large air force base in Mariscal Estigarribia, its troops deploy in Paraguay ostensibly for humanitarian reasons, and the U.S. embassy has urged the Paraguayan military to augment its presence in the country’s north.

Photo: Fernando Lugo, via website.