La Ruta Cana:
The Political Economy of Cane-Alcohol Production
in Northwestern Ecuador

Gregory Guest
Department of Anthropology
University of Georgia
Athens, Georgia

INTRODUCTION

This paper is the result of a preliminary investigation conducted in collaboration with a multi-institutional project - SANREM (Sustainable Agriculture and Resource Management) - composed of various government and non-government organizations. For a period of eight weeks I found myself immersed in the daily activities of a small rural community in Ecuador, Charlito - one of the research sites in the project, and, as I was soon to find out, the hub of a rural economy based on the production of moonshine. Derived from the juice of sugar cane which scatters the hillsides surrounding Charlito, this alcohol is consumed in situ, but more commonly it is sold to neighboring communities, with the majority flowing to Quito, the nation's largest city and capital. It became clear that if I were to understand anything about the economics and related ecology of this region I would first need to grasp the workings of the production process and identify product flows. A second factor influencing the nature of the study was its participatory design, which brought to the forefront local concerns on a daily basis. What I kept hearing from the local inhabitants was a general discontent with the local economy, which was typically described as stagnant and lacking economic opportunities. In light of this second conditioning factor, I decided to track, as best I could, the flow of capital moving within the local economy, in an attempt to identify possible reasons behind such a perception.

Data presented in this paper are the result of these conditioning forces and were obtained through participant-observation, interviews, and a household inventory. I begin with a description of the research area and production process, which is followed by a brief treatment of migration and its relationship to the local economy. The final section entails a discussion of the results in a more theoretical context, in which I touch upon some implications these findings may have for petty commodity production literature and geographically oriented economic theories.

THE RESEARCH SETTING

History and Physical Character

Occupation of the general area around Charlito can be traced at least as far back as the time of conquest. Salomon (1986:34), for instance, writes that at the time of the Spanish arrival, the area was inhabited by a group of forest-dwellers called Yumbos. Although there is little evidence that this Yumbo area was under direct Inca control, it was likely part of a large trade network that incorporated several cultural regions linked by traveling merchants - a system that would subsequently be supplanted by a more European model. Throughout the early part of the colonial period the land in the study area was in the hands of the Jesuits, who held large haciendas composed primarily of sugar cane plantations (Basile 1974:99). In 1767 the Jesuits were exiled from the country but the land has, as far as can be determined, been maintained in this capacity; and although the precise environmental history of the study area is still largely unknown, older residents confirm that sugar cane has been grown in the general region for the last 100 years. The demographic history for the region, like the botanical history, is also less than clear. There is general agreement, however, that the current demographic make-up in the region is the consequence of in-migration from other areas of the country (and to a lesser degree, from other nations). The more recent, and most numerous, group of migrants came to the area in three distinct waves during the 1940's, the 1960's and the early 1970's (Rhoades 1994:22); and local autodiagnosticos (reports written from community workshops) indicate that the four satellite communities in the study region were officially incorporated between the years 1961 and 1978. The contemporary region of study is composed of Charlito and four surrounding communities located several kilometers to the north along a dirt road, having a combined population of approximately 3000 (Martinez-F. 1996). Situated along the western slopes of the Andes, at an altitude of 1200 meters above sea level, Charlito is accessible by a single gravel road from Quito, a two and a half hour journey via public bus. Due to its location in the warmer tropical zone and relative proximity to Quito, the region is well situated for growing sugar cane. Communities even only an half-hour drive eastward, toward Quito, are at too high an elevation, and therefore too cool, to grow sugar cane. Adjacent areas further to the west of the region have farther to transport goods to the source of consumption, and many are inaccessible by road. The town of Charlito itself is modest in appearance, consisting of a central square surrounded by houses, a church, an extension office, and service oriented shops such as general stores (which sell almost anything one can imagine), agricultural chemical stores, purveyors of gasoline, restaurants, and merchants of the local moonshine - agua ardiente, also known as trago. Its central location with respect to the four surrounding communities makes Charlito the logical point of distribution for the majority of products that leave the area, yet in spite of this role the town is still in many ways isolated from Quito and the rest of the country. Due to the surrounding mountains, there is no television reception in the town, postal service is limited to once per week, and there is only one quasi-functional telephone in the entire town. Normally local inhabitants have to travel to another town, 30 kilometers to the east, to make calls. As for physical connections, there is a daily bus service between Charlito and Quito, or occasionally one can catch a ride with private vehicles on route. The latter is not too common a mode of travel, however, as there are only about 20 vehicles in the entire region, and most of these are trucks with minimal passenger space. Transportation to the four outlying communities is even less frequent than for Charlito: there is one bus that travels to these more remote areas, but many routes are often hitchhiked or walked, depending of course, on the distance of the destination. Economy The region is agricultural in nature, the mainstay of the economy being sugar cane, or caña in the vernacular. As Table 1 shows, the percentage of land used per crop is dominated by sugar cane (46%), the vast majority of which is processed locally to make agua ardiente. In fact, out of a total of 67 cane processing factories (fabricas) counted in the region, 65 are devoted solely to the production of trago. The remaining sugar cane is either made into panela (solid brown sugar), or less commonly, panela polvo (powdered sugar). The other crops listed in Table 1 are grown for subsistence, regional circulation, or external market consumption. In addition to the managed resources listed, there are also ongoing extractive activities that utilize forest resources from the surrounds. A local craftsman, for instance, makes furniture from laurel trees obtained from the surrounding hills and sells his wares in Quito, and occasionally in Charlito, on a per order basis. Wild caña guadua, a strong exemplar of the bamboo family, is sometimes harvested from roadsides and sent to Quito to be used in construction. There is also a flower 'plantation' on the outskirts of town that provides street vendors in Quito with goods, but this is now up for sale due to labor shortages and related problems of distribution. Crop Number of Hectares Sugar Cane 463 Maize 175 Yuca 140 Bananas 102 Morochillo 48 Achiote 15 Beans 14 Peppers 9.0 Sugar Cane/Banana 7.0 Maize/Yuca 6.0 Naranjilla 6.0 Fruit (various) 6.0 Tomato 2.5 Garlic 2.0 Rice 2.0 Yuca/Banana 2.0 Orchards 1.5 Yuca/Sweet Potato 1.0 Citrus/Lime 0.7 Coffee 0.5 Carrots 0.5 Yuca/Sweet Potato/Beans 0.5 Total 1004.2 Table 1 Major Crops in the Charlito Region. (From Terra Nueva 1996)

Cattle and dairy production are extant in the area as well, but these enterprises are more common in the cooler environs upslope and to the east. Suffice it to say that sugar cane, and the liquid distilled from its juice, are the dominant features in the local economy, and so it is to these that I now turn. LA RUTA CANA Caña Ecology. There are three species of sugar cane that local inhabitants use in making agua ardiente - caña dura, caña suave, and caña forestal, and although all of these species are used in production, the first two are more common than the latter. Maturation time for all species is similar: from the time of first planting - done by placing clippings in half-meter deep holes - young saplings take approximately 24 months to grow to a height suitable for cutting (at least two meters). While for adult plants already established the time between harvests is about 18 months. Sugar cane is a relatively risk-free crop, for several reasons. First, although young saplings in the very early stages of growth may be somewhat vulnerable to boring insects, mature plants are not often plagued by pests due to their hard outer layer. Second, the life-span of sugar cane is relatively long. According to one local farmer's estimate, a field of sugar cane, if cared for properly, can be productive for as long as 70 years, with minimal decreases in output. There is not perfect agreement among farmers, however, with respect to sugar's longevity, and some reports suggest a significant decline in productivity after only a few years; but based on the average response given in interviews, a healthy life-cycle is somewhere in the range of 25-50 years, after which time a two to three year fallow period is needed, and the field subsequently replanted. Although there may be contention as to the exact longevity and ecological sustainability of sugar cane, it is generally known in the community that productivity does decline in some measure over time, and local estimates are fairly consistent in terms of productivity: "old" and "new" fields produce 3500 liters/hectare (l/ha) and 6000l/ha of trago, respectively, with the average being 4000l/ha. In addition to the age of the plant, informants identify several other ecological factors involved in productivity. There is general agreement that good drainage, provided by a modest slope, and moisture are key ingredients to a prolific harvest. It is also said that production quantities (of trago) per hectare are higher in the summer months because the drier weather leaves less water in the stalks, and hence creates a more concentrated juice. The caring of sugar cane is relatively simple, requiring periodic "cleaning", a process which entails walking through the fields and cutting away dead leaves from the plants. Fertilizers, particularly of the chemical variety, are generally not used, but organic matter is often placed around the wells of newly planted individuals to provide nutrients and retain moisture. In mature fields this function is performed naturally by dead leaf matter fallen from the plants. It is also not customary to use pesticides, although exceptions may be made occasionally in newly planted fields to protect young saplings. The Production Process. Due to different growth rates and initial planting times sugar cane fields over time become somewhat heterogeneous in terms of individual plant size. As a result, cortadores (cutters) must first walk into an area and look for a mature section to cut. In times when there are no fields ready for harvest, they will often "clean" the fields by clearing dead leaves from the plants with machetes. On one farm this cleaning is done every twelve days, while others report frequencies of every one to two months. When there is an abundance of cane ready to be cut cortadores work approximately eight hours per day in the fields, and a team of two can usually clear one hectare per month. When the season is particularly favorable, and labor accessible, three cortadores may work in a field at one time. Once the cane has been cut and thrown into piles in the field, cargadores (carriers) stack the pieces (about one meter in length) onto the backs of mules fitted with a special cargo-bearing apparatus and lead their cargado to the fabrica where it is unloaded. The number of cargadores needed depends on the number of cortadores working, and the distance between the fields being cut and the fabrica, but the usual number is two. A typical trago fabrica, contains three principle pieces of equipment, which are arranged in a vertically descending order so that gravity carries the liquid through the successive stages. The first piece of equipment in this sequence is the trapiche, a motor-driven press comprised of two interlocking iron cylinders which crush the cane stalks as they are fed into the machine. The motor that drives this action is a large gas or diesel engine attached to a long canvas band, which acts as a drive-shaft, and turns the trapiche. There is customarily one person situated at the trapiche, the molador, who is responsible for feeding the cane stalks continuously into the moving wheels. Alongside the molador, works the cargador de bagaso, in charge of carrying the desiccated residual fiber away from the trapiche and onto refuse mounds several meters distant. Though this fiber is used for fuel and compost, there is still a large surplus that remains which is eventually burned. From the trapiche the extracted juice flows through the cajoncito, where it is crudely filtered, and then down into the cajones - large wooden containers, rectangular in shape, and with a capacity of up to 600 liters. Once fermented, the juice, or guarapo, is released by the distilador - who, in addition to monitoring all flows, maintains the fire under the still - from the cajones into the ambique, the pressurized still. The ambique is a three-part system, consisting of two cooking components (the calentidora and pondo/alieton) and a copper coil (serpentina) which cools, and thus condenses, the trago vapor as it escapes from the pressurized ambique. Both the serpentina and lente (a small circular container surrounding the column of the pondo) are fed a continual supply of cool water, the source of which varies with each operation. An ambique can be made of stainless steel or copper, and while stainless steel varieties are cheaper and more durable, trago aficionados claim that their copper counterparts make a superior tasting product. Subsequent to the condensation stage, the distilador collects the trago - which is at this point in the range of 65-70% alcohol - in a plastic container, which, once full, is emptied into a larger receptacle, usually a 220 liter plastic poma. The entire process is carried out under two open-air structures, constructed from wooden poles and corrugated metal roofs, collectively called the choson. Although there are tradesmen in the locality who repair the above equipment, it is not sold within the region: trapiches used in the Charlito area are almost exclusively bought in Atuntaqui (a small town north of Otavalo), while a motor or ambique can be purchased in Quito. The wooden cajones are made on the premises from local trees, and fuel for the motor is obtainable in Charlito, from two different shops. The residual cane fiber, of which there is always an overabundance, is, subsequent to drying under the sun, used to feed the fire under the ambique. Division of Labor and Land Relations. The typical production system requires eight persons (normally males) who, work an average of 55 hours per week, and occupy a total of six possible positions, which are occasionally rotated. The labor structure for an average fabrica can be summarized as follows: 2 cortadores 1 cargador de bagaso 2 cargadores 1 distilador 1 molador 1 cook (for the crew) The division of labor in any given operation also involves, in some arrangement or another, a land-owner and hired workers. Landowners employ one of three strategies with respect to their involvement in the production process. They can sell their cane to a fabrica, which is usually done in cases where the amount of land owned is relatively small (i.e. less than three hectares). Alternatively, they can share-crop with someone in an apartir system. In this type of relationship the landowner supplies the sugar cane and equipment, while their partner, the partidario, is solely responsible for labor and production. Each is compensated with one half of the profits. A third option for a landowner is to work directly in the production process (usually as the distilador) and retain all of the profits. All three forms of labor relations are common in the area, and the preference for a particular system can depend on a combination of many factors, such as age and health of the land owner, availability of labor, infrastructure and capital, and the amount of land owned. The most common, and preferred type of labor in the trago industry is familial. Family members are hired whenever possible, with outside obreros (casual laborers) filling labor needs only when necessary. Estimating from interviews with three fabrica owners, family labor usually comprises about 75% of the total. In one large fabrica, for instance, the workforce is composed of the owner, one son, two nephews, one son-in-law, and two non-family members. The standard wage in the region, and this is true for most family members also, is a daily rate of 10,000 sucres based on an eight- to nine-hour work-day. Cost Structure. Although it appears that the cost structure remains fairly constant for most of the enterprises in the region, it must be remembered that the numbers I present below are averages based on interviews with owners of two fabricas and several additional informants familiar with trago production. As such, the sample may not be representative of all fabricas in the region and should therefore be interpreted with caution. It may well be that the fabricas observed by the author are much larger than the average, or that informants interviewed are biased in terms of the size of operation with which they are familiar. One fabrica observed, for instance, uses a home-made ambique, constructed from an oil drum and bamboo. Another fabrica, which produces panela, uses horses to power its trapiche. These features would undoubtedly introduce somewhat different dynamics into the analysis, and warrant a more comprehensive survey of the fabricas in the region. In spite of the above limitations, several assertions of a more general nature can be made. First, with the one noted exception, all fabricas in the region use a trapiche powered by fossil fuel. Second, the price of land and sugar cane is relatively consistent for all operations in the region. Moreover, even if there are more home-made stills in the area than assumed here, it is still likely that the larger-scale enterprises produce a proportionately higher amount of trago in the area and thus can be seen as being representative in terms of overall volume. Having made these qualifications, I can now offer a brief summary of Table 2. The numbers in the left column represent the start-up costs that are associated with an entire operation, from planting cane to processing trago. Fixed Costs Variable Costs Sugar Cane 3 million/ha Labor 10,000 per day/per person Land 2.5-3.5 million/ha Water 120,000 per month Ambique 10 million Fuel 20-30,000 per day Trapiche 8 million Food 3000-5000 per day/per person Mules 1 million each Choson 1 million Table 2 Cost Structure of the Fabrica (in sucres)

Based on these numbers, one can see that the amount of capital required to set up an operation is substantial. It is generally agreed upon within the area that a minimum of five hectares of cane is necessary to sustain an average family, which, based on the figures below, would require an initial investment of over 70 million sucres, or $23,000. The variable costs for each fabrica, listed on the right, would depend on the size of the operation as well as other factors which will be discussed later. The monthly output of any given fabrica will vary with the size of the machinery, and the distance required to transport the cane to the fabrica. To a lesser degree, the availability of labor, usage of chemical catalysts, and the quality of the plant will also affect production rates. Given this variation it is not possible to generate accurate production numbers based on the averaging of data. Instead I provide two individual cases below to give a more complete view of the production process. In this first example the system is based on an apartir arrangement. Don Jorge owns three separate fabricas in the region and a total of 72 hectares (ha) of land - 30 of which are devoted to sugar cane. He share crops with three different partidarios, one of whom is Armando, his brother-in-law. As per the normal share cropping arrangement, Armando manages the labor and is responsible for all expenses, while Don Jorge provides the cane and the fabrica. Armando's fabrica runs for only six months of the year, normally has eight paid employees (excluding Armando himself, who also works), and processes about one hectare of sugar cane per month. His trapiche is medium sized (#4 on a six-point scale) and produces 1200 liters (2-600 liter cajones) of juice in an average work day. This translates into 220l of trago per day, or 5500l per month, all of which is bought on the premises by middlemen (intermediarios) from Quito for 800-1000 sucres per liter (S/l). According to Armando, the limiting production factors in his operation are the supplies of sugar and labor. The second fabrica, owned and managed by Don Arturo, is purported to be the second largest in the entire region, with a #5 trapiche that works all year round. Don Arturo owns 35ha of land - 23 of which is sugar cane (he will also sometimes buy cane from others at a price of 800,000 S/ha) - and employs six people, who, in addition to himself, work six days a week. However, Don Arturo often works seven days a week, since he has to transport the trago to Quito in addition to being the distilador. The trapiche in this operation can produce as much as 1200l of guarapo in four hours, which, after fermenting 24 hours, can be processed into 220l of trago. With a distillation rate of 220l per every four hours, the weekly production rate is close to 4000l of trago, all of which is transported into Quito and sold directly to pre-established buyers at a price of 1100 S/l. Distribution. The distribution network is complex, composed of a myriad of geographic routes, a wide range of social relations, and numerous modes of transport. It can be bought, for example, directly from the fabrica by middlemen. This is done in a number of ways. In the outlying areas many of the fabricas are inaccessible by road, so trago is carried by the producers down into town on foot or by mule, where it is bought by middlemen (who, in all three cases observed, also run the local general store). In other cases producers will transport small quantities of trago directly into Quito on the top of a public bus which they accompany to the destination. Alternatively, middlemen from Quito or Charlito will drive into the outlying regions, pick up the merchandise, and take it to the next destination, which could be Charlito, Quito, a location in between, or any combination of the three. From mid-point locations trago is either sold directly to consumers or transported further by other merchants into Quito, or less commonly Otavalo and Ibarra. The role of a middleman varies according to each situation, but in many cases they serve as sources of credit or cash advances. It is often the case that producers, particularly those of the small-scale type, are short of capital, so an immediate, or in some cases an advance, payment arrangement is an attractive offer. With the advantage of having a relatively ample supply of liquid capital, a middleman can afford to store trago until it is consumed locally or sell it on credit to the next level of middle operators. In essence, the middleman can absorb the time lag in the supply-demand equation with virtually no impact. Don Jose, a local merchant in Charlito, is an exemplar of this type of arrangement. He drives to several of the fabricas in the surrounding area on Fridays and Saturdays, purchases trago on a cash basis, and transports it to his store in central Charlito where it awaits pick up the following day by other middlemen from Quito. These secondary movers then take the trago to points further along the distribution chain. Don Jose maintains his import in the chain via supplying credit to both types of parties with which he is involved. As there are a total of three primary middlemen in Charlito, competition exists, and incentives must be given to secure clients. As a result, it is not uncommon for Don Jose to pay a trago producer up to two weeks in advance to ensure their business. Depending on the capacity of the fabrica, the amount of the advance can be as much as one million sucres. Don Jose also will permit up to a week's delay in payment from the secondary buyers with whom he deals. This arrangement benefits the secondary contingent by giving them lead time to sell the trago and procure cash to pay for their shipment. Another service the middlemen provide is a central venue and consumer base for the product. Because fabricas are often located in remote locations, they are not readily accessible to consumers. Moreover, many of the producers - and again this is especially true for the smaller operations - do not possess the necessary contacts in Quito or other large centers to liquidate their product: nor do they have the means, such as a vehicle or an efficient form of communication, to establish these contacts. On the consumption side of the channel, trago can be bought 'retail' by the liter, in larger quantities such as a 220l container, or in virtually any amount desired. Although demand is fairly consistent, it is greater during special times of the year like mother's day, village fiestas or local weddings, and the price will rise slightly in response. Figure 1 depicts the observed channels of distribution and retail prices of agua ardiente at each stage. The prices on top of the distribution lines indicate the average purchasing price for the 'wholesale' merchants in a particular channel. As would be expected, the price increases the further the product is taken from its source. Referring to both Figure 1 and Table 2, the average working profit can be estimated for the two enterprises examined. In the first example, the apartir system, total costs for one day, to produce 220 liters of trago, would be 154,000 million sucres, while the gross revenue would range from 176,000 to 220,000 sucres depending on the current selling price (800-1000 S/l). Taking the above as a working estimate, the gross daily profit would be from 22,000-56,000 sucres, which would subsequently be divided, as per the apartir agreement, between the partidario and the landowner. Within this system the profit margin per liter of trago is 100-255 sucres, and is maintained for six months of the year. This translates into an income of anywhere between 2750 and 7013 sucres per hour for the partidario, and an investment income of the same magnitude for the landowner. In the case of the second fabrica, the numbers are noticeably different. The daily production rate is approximately 600 liters, accomplished with six paid employees. The owner transports this to Quito himself where he sells it for 1100 S/l, rendering a gross daily revenue of 660,000 sucres. The daily expenses for this operation are 136,000 sucres, a sum substantially smaller than in the previous case. The reason for this difference is predominately labor based: labor requirements are less because the distance to transport the cane is relatively short, and the owner's wife cooks for the crew. Based on these figures, the net daily revenue earned from this operation is 524,000 sucres, and the profit margin 873 S/l, earned over the entire year. In this case the owner's hourly income works out to approximately 65,500 sucres per hour. The contrast between the above two fabricas give clues as to the limiting factors in profitability. Examination of the two cases reveals three primary variables in the monetary outcome of the production process - size of equipment, relationship to land, and use of a chemical catalyst. Informants identify the ambique as the slowest link in the system, and as such, larger equipment in this regard is extremely important for faster processing and higher production rates. The same relationship is true, but to a lesser extent, for the size of the trapiche. Second, direct ownership of land, in addition to good location Figure 1 Distribution Routes and Retail Prices of Trago (sucres per liter) and quality of a given cane field, greatly increases profit margins by reducing labor costs and eliminating share-cropping fees. The third factor, a chemical additive, is purported to speed up the fermentation process by a factor of two. It is not used by all fabrica managers, however, because it is said to negatively affect the flavor of the product. Although the calculations for the second example show the profitability of trago production to be quite sizable, this does not appear to be the situation in most operations. The majority of fabricas use mid-sized machinery and have a limited supply of sugar: most operations also do not possess a vehicle to transport the product themselves and thereby procure higher prices in Quito. In the larger picture, the overall consensus when talking to local farmers is that the trago industry is very mediocre in terms of earning potential (not to mention from the laborer's point of view), and if given the opportunity they plant alternative crops or have land put to cattle pasture. Another mitigating factor in operations appears to be the amount of labor required in production. Relative to cattle ranching, caring for, cutting, and transporting sugar cane for processing is labor intensive, and labor is not a surplus commodity in the region. I discuss this dynamic below. HUMAN CAPITAL AND MIGRATION Migration has historically been a dominant element in Ecuador's demographic landscape, and has taken on many forms (Preston 1987). One manifestation in this regard is the high degree of urbanization which has occurred in the country, particularly in the last few decades (Rudel and Richard 1990). Traditional theories of migration tend to offer wage differential explanations for the inter-regional movement of individuals (Faini and Venturini 1994; Burda 1995), and although it cannot be said for certain, it appears that these monetary explanations are applicable, at least partially, to the study region. All of the youth interviewed readily paint a bleak picture with respect to local opportunities, saying that the only work available in the region is wage labor in agriculture, perceived as particularly strenuous and poor paying. In fact, when a group of teens were asked to list and rank (in terms of pay and job satisfaction) all of the possible employment options available to them, laboring in agriculture was ranked last out of a potential ten occupations. As a result of this situation, many young people move to Quito to seek more 'attractive' employment. Although it is not easy to procure employment in Quito, jobs there tend to be better paying than in rural areas, so much so that it is often possible to save surplus income. Women, who tend to move into retail or service industry positions, can earn from 250,000 to 750,000 sucres per month, while male migrants are most likely to enter the manufacturing sector, for a similar range of wages. This contrasts with the maximum monthly wage of 250,000 sucres for agricultural work in Charlito. It also fairs well in comparison to prospects of self-employment or subsistence farming. According to a recent survey (Terra Nueva 1996), more than 30% of the local families are landless, while another 30% own less than five hectares of land. In effect, 60% of families in the Charlito area are without means of directly producing at the subsistence level, since according to local informants the minimum amount of land needed to feed an average sized family is five hectares. Land is available for purchase, but given its cost (three million S/ha), the negligible earning potential in the area, and the inaccessibility of credit (Teltscher 1994), it is, de facto, unobtainable for the vast majority of the population. In contrast, the change of lifestyle that follows migration can be fairly lucrative. One young female migrant, who moved to Quito from Charlito four years ago and found a well-paying job in retail, is able to save an average of 50,000 sucres per month, working 55 hours per week. In comparison to the alternative of working in the capacity of an unpaid domestic worker in Charlito, this life provides, in addition to the excitement of urban diversions, a financial independence virtually unattainable in the rural setting. Education and age have also been linked to migration in Ecuador (Preston 1987), and in the case of Charlito, this line of research seems to be confirmed, as both older and younger informants stress the importance of education, particularly in procuring employment in Quito. It is said that nowadays a minimum of a high school diploma is necessary to obtain relatively good work in urban centers, and that one's chances increase greatly with post-secondary education, which, in contrast to high school, is only available outside of the study region. As a result, those families who can afford to do so, are likely to send their children to post-secondary institutions in urban centers. Thus, it is of no surprise that the majority of adolescent children of the large landowners interviewed are currently attending post-secondary institutions in Quito. The relationship between these population dynamics and the local economy in Charlito, in addition to other possible implications, are dealt with in the discussion that follows. DISCUSSION While this study cannot adequately answer any large theoretical questions, or be applied to a diachronic analysis in any meaningful way, it does raise some interesting questions. In petty commodity production (PCP) literature, one of the main theoretical concerns is the positioning of PCP economies in a larger historical context - that is to say, their relationship to full-blown capitalist economies (MacEwen Scott 1986; Cohen 1991:39). Two of the components involved in this discourse is the role family and wage labor play in the purported transition from peasant to capitalist societies (Cohen 1991:39). In some "prototypic-industry" models PCP societies are defined by their degree of unpaid (i.e. without wage) family labor in the production process, and envisioned to form a bridge between peasant economies and 'true' capitalism (ibid.). Within this model, the commodification process is extended to "land and labor power by replacing (often forcibly) kinship- and community-based social relations with social relations based upon private property in the means of production " (Binford and Cook 1991:66). The case in Charlito is interesting in this regard, since it contains some elements of both types of economies depicted in the above model. According to all of the interviews conducted, family members compose the majority of the labor force, are preferred over non-family members, and, more importantly, they are paid the same wage as non-kin (with the notable exception of spouses). Perhaps this is a reflection of the perceived labor shortage and the negative sentiments of the local youth with respect to agricultural employment. It may be, and only an historical analysis could determine this, that the area was at one point in the past a 'true' PCP economy, and family members engaged in a form of alcohol production, that, due to infrastructural or capital constraints, rendered too little capital surplus to provide wages. With the building of the road to Quito (which occurred 15 years ago, according to one informant) facilitating the physical connection to a core center, it may be that the outflow of young people, combined with an increase in capital influx (due to an expansion of the consumer market), influenced the structure of labor, inducing, and simultaneously permitting, owners of production to offer wages. If this were the case then perhaps what is observed today is a remnant of such a transitional period. It may also be the case that the observed predominance of collateral kin in the production process, such as nephews and son-in-laws, is a reflection of the final stage of the commodification process and reflects a transition in the division of labor. The historical scenario I propose is, of course, conjectural, but could be tested fairly readily through interviews aimed at uncovering the historical progression of the division of labor in the region. One might then correlate these findings with significant historical events, such as the land reform of 1964 or the various liquor laws that have been enacted in past decades. Another implication of the present study entails capital flow and distribution of wealth. In classic world-system models, core regions are those which "specialize in the production of the most 'advanced' goods, which involves the use of the most sophisticated technologies", while economic activities in the periphery tend to be more "labor intensive" and less technically advanced (Shannon 1989: 24-25). Because of the regional disparity in production capacity, peripheral regions often send raw materials or low-tech products to the core where they are consumed or made into finished products. The relationship between these two types of regions is further characterized, according to this model, by exploitation of the periphery, with the core receiving "most of the wealth (surplus value) generated in the periphery" (ibid.:29). Several theories have been posited to account for this inequity, a commonly cited one being Arrighi Emmanuel's theory of "unequal exchange", which stipulates that it is inter-regional wage differentials which create the imbalance of capital flow (ibid.:31). Other treatments of observed regional disparities have identified additional factors involved in this relationship. One theory, for example, hypothesizes that low income regions will grow more rapidly than richer areas and that, given time, factor mobility will enhance the convergence process (Faini 1996:122). In short, convergence theories, founded in Adam Smith's notion of the "invisible hand", predict that, if capital is mobile and commodity trading is free of obstruction, economic disparities between two regions will eventually converge. Given the relatively long temporal dimensions embodied within these "convergence" theories, it is impossible to make any sort of assessment in absence of historical data. Furthermore, capital is a slippery creature, one that does readily lend itself to study, particularly in only an eight-week period. Notwithstanding these limitations, several surface patterns can be identified from the results of this study which may be worth pursuing at a later date. One such pattern is the apparent disproportionate addition of value to trago when examined in a core-periphery context. In the fabricas studied, the profit margin per liter of trago for a producer (a sharecropper or landowner - not a wage laborer) ranges from 100 to 850 sucres, the latter figure being an exception rather than the rule (as it was obtained from the second largest fabrica in the region). In contrast, in Quito, the value added ranges from 400 to 1400 sucres per liter, the exact number depending on the location of the point consumption and the number of people involved in the transportation of the product to this point. A similar picture of disparity emerges when looking at household items, as illustrated in a household inventory conducted in Charlito. Every item in a typical household was listed and categorized in terms of its cost, place of origin (of the product itself, not raw materials), and place of purchase. Calculation of the proportional cost, and numeric representation of items, based on the origin of their production show a bias towards items produced outside of the region. The household analyzed contains a total of 127 items, of which only 27 (21%) are produced in the local area: the remaining 100, or 79%, are of an external origin, mostly from Quito. When this inventory is narrowed to include only fixed, non-food items the resultant ratio turns out to be even more uneven with just 16% of these items originating in the local vicinity and 84% externally. When a monetary value is added to the equation we see a further increase in disparity. With the combined monetary value of all non-food household items equaling roughly 16 million sucres, locally produced items account for only 10% of this total. The significance of the above results cannot be determined in a preliminary study such as this. They do suggest, however, the possibility of a geographic imbalance in favor of the core, in terms of capital flow (including human capital); and although this would not be a surprising finding, given the federal government's history of partiality in its policies towards the urban/industrial sector (Southgate and Whitaker 1994:21), it would have to be studied in a more thorough and systematic fashion in order to render a reliable conclusion.

CONCLUSION

In this paper I have focused on the structure and processes involved in the production system of a rural-based commodity. I have also discussed geographical connections and inter-regional exchange as they relate to this system. In maintaining such a limited focus, however, I fear I may have presented an oversimplified account of the subject matter, glossing over issues - particularly those related to power - that defy spatial boundaries. In light of this, I feel a few closing comments on such matters are in order. Maiguashca (1993:441), in discussing economic development, writes that "in the case of Ecuador. . . the market is not a part of the natural endowment of the country", and gives in support of this premise several examples in recent history in which the market has failed to fill the void created by government laissez faire policies. One of these shortcomings is the inability for the majority of Ecuadorians to participate in the market. Maiguashca (1993) notes that although theoretically everybody is free to participate in the market, in reality inequities in the distribution of knowledge and power create an overbearing counter current for the integration of the majority of the country's citizens into the cash economy. This line of thinking may have a lot to offer localized studies such as this, and although this angle is not addressed explicitly in this paper, I believe it does have relevance to the current conditions in Charlito. The nature of its relevance, however, is another question in need of exploration and goes beyond the scope of this paper. What I hope to have accomplished in the above pages is to provide the interested reader with some basic data apropos small-scale alcohol production in Ecuador in such a way as to stimulate new ideas and avenues for future research. Whether or not my goal has been achieved is for the reader to decide.

Acknowledgments: The research upon which this paper is based was funded by a National Science Foundation Ethnographic Research Training Grant. I am also grateful to my supervisor Dr. Robert Rhoades, the SANREM field-team, and the people of Charlito for their continued support and cooperation. Without their help this paper would not have been possible.

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