Salvador reforms back in US spotlight; Farms given to peasants make gains . . . and losses

Three farms - expropriated from their former owners and handed over to local peasants - straddle the bitter controversy over El Salvador's land reform.

Las Cruces, situated in coffee-growing Santa Ana province where the hills rise thickly wooded and cool to the Guatamala border, turned a healthy profit last year under its new peasant owners.

Singuil, also in Santa Ana province, chalked up a disastrous loss.

La Mosquitia tiptoes along the edge of a minor political disaster. A year ago the peasants working on it won provisional title. The owner protested, ordering the manager to toss the peasants off the land. The peasants appealed. Early in March soldiers reinstated them.

''We'll manage fine,'' says Julio Calsadio, the cooperative's president, with a toothy grin and a wave at the fields of ripening maize. But he conceded that the owner had probably not given up the fight.

The results of this country's land reform are now being analyzed by a Salvadoran government team, with advice from the UN Food and Agriculture Organization (FAO). After reviewing a sample 60 farms, the team has found that 33 succeeded, like Las Cruces, in making a profit. The remaining 27, like Singuil, showed a loss.

''It's too early to judge,'' says Carlos Rucks, an Uruguayan FAO official who works with the team. ''But financially speaking, the initial results are certainly mixed.''

The conflicting evidence, multiplied a hundredfold, would be difficult enough to analyze even without El Salvador's vicious civil war. But 40 of the larger properties expropriated under the reforms lie smack in the war zone. And many more are too close to the fighting to be regularly screened.

Officials from the embattled American Embassy in downtown San Salvador never travel out of the capital without armed guards. They have to rely primarily on Salvadoran government estimates about the progress of reforms.

Yet, however tentative, these estimates have been a central factor in determining whether El Salvador receives $294.3 million of American aid for 1983 . President Reagan certified to Congress Tuesday that sufficient progress has been made in El Salvador in areas such as land reform, election prospects, and human rights to justify $166.3 million of economic aid. In addition, $128 million has been earmarked for El Salvador under the Caribbean Basin initiative.

In recent weeks, as the July 27 certification deadline approached, opinion on the land reforms has polarized sharply.

One camp claims a success. Under the first phase (affecting properties of over 500 hectares), 329 farms have been handed over to cooperatives, which comprise a total of 70,000 peasants.

The second phase (properties between 100 and 500 hectares) has been quietly shelved.

Under the third phase (in which peasants who rented less than 17 acres are entitled to claim it), 29,961 families had won provisional titles by the end of June.

This, say supporters, represents considerable progress compared, for example, to neighboring Honduras. There, it has taken 20 years of land reforms to hand over roughly the same area (675,000 acres) to 35,128 families.

''This is not propaganda,'' says Carlos Rucks of the FAO about the El Salvador program. ''It's for real.''

This body of opinion concedes that there have been setbacks since the March 28 election, which elected a right-wing assembly. But, it insists, the Army holds the real power in El Salvador - and the Army is well aware that future US aid hangs on the success of the reforms.

Critics disagree strongly. They are convinced that the right-wing, landowning class is firmly committed to the failure of the land reforms and that its hand has been immeasurably strengthened by the election. In the long run, goes this argument, US prestige is too firmly committed to the regime to withdraw support - and this knowledge has further emboldened the right wing.

At the same time, say critics, life for the peasants (already imperiled by the savage civil war) has acquired added danger from angry landowners whose farms have been confiscated.

''It hurts to say it - but I'm pessimistic,'' said Robert Torres, from the AFL-CIO's American Institute for Free Labor Development, which is working with peasant organizations in El Salvador.

The critics' main concern is that in one of its first major decisions after the March 28 election, the assembly voted to exempt cotton, livestock, and basic grains (like maize) from the scope of the third phase of the reforms. This effectively undermined the program. It also encouraged a spate of evictions.

According to the peasant organization Union Communal Salvadoreno (UCS), 3,405 families with provisional titles were evicted between March 28 and May 15, often violently. On some estimates, the figure may run as high as 7,000.

The pace of evictions has now slowed, and some peasants (like the 107 farmers on the Mosquitia) have been reinstated by the Army. But peasant leaders warn that the Army's support for the Mosquitia cooperative is probably exceptional.

''I would say that at best, only half the local Army commanders want the reforms to work,'' said one of the nine members of the UCS national executive, at headquarters in the town of Santa Tikla. Like others, he insisted on remaining anonymous.

Also atypical is the ease with which Julio Calsadio succeeded in raising 45, 000 colones ($18,000) of credit for the Mosquitia cooperative from the local agricultural bank. The government of El Salvador is desperately short of cash, and largely dependent on US aid. Of that aid, some $57 million is intended for the land reforms this year.

Many landowners, convinced that reforms were inevitable, allowed their properties to run down over the last few years. According to Carlos Rucks and his colleagues, the peasants who took over the Singuil farm found that the manager, Miguel Boto, had illegally transferred machinery and even livestock to the previous owner. This, they said, was one major reason why the farm started off losing money - and why it may never pick up.

''Anywhere else, the cooperative would be declared bankrupt and sold off if it continued to lose money,'' commented one diplomat in El Salvador. ''But here that's a political impossibility. Is the government prepared to pour money into unprofitable cooperatives? If not, the peasants are going to find themselves locked into worse rural poverty than before.''

Perhaps most significant, the reforms do not appear to have transformed Salvadoran society by breaking the economic dominance of the landowning class. Prior to the reforms, the so-called quatorce familias (14 families) controlled the production and marketing of essential products like coffee, cotton and sugar.

All three are untouched by the reforms because of the recent exemptions voted by the assembly, and the failure of the second phase. In addition, if Congress passes President Reagan's aid proposals, the better part of $166 million will be channeled into the private sector, further strengthening the landowning class.

Critics of the reforms concede that their arguments are unlikely to result in a vote in Congress that would undermine President Reagan's prestige and conceivably his whole Central American policy. But they point to the way irony piles on irony: A right-wing American administration, committed to free enterprise, finds itself championing a left-wing land reform program that, in strict Republican business terms, is probably unworkable - as well as inimical to the political class in El Salvador that is supposedly being protected against subversion by American aid.