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Guano Wars, ICE Case 61


1. Abstract

The historical case about guano and its impact on the trade and the environment is an interesting one. Guano, a natural fertilizer made from bird droppings, was a prized commodity during the 19th century and heavily traded by European and American traders. It helped build countries like Peru, expanded empires such as the United States, made companies and individuals involved rich, and exploited the local populations and the environment. Peru will be examined in detail because it was it's guano that was most valuable to foreign traders. Also guano and the environment will be looked at some length and what other problems lie ahead for the guano birds and their environment.

2. Description

Guano was widely used by the native populations of pre-Spanish Latin America for centuries as a fertilizer to increase crop yields. However, it was not until the early 1800s that guano was rediscovered by the Europeans to have valuable agricultural benefits as a fertilizer. The best source of guano was discovered on a series of islands off the coast of Peru which are barren and rocky with no vegetation due to lack of rain in the area. Peru's primary guano islands are the Chinchas, the Ballestras, the Lobos, and the Macabi and Guanape islands. Other islands around the world, off Africa, the Caribbean, and the Pacific islands, also contained abundant guano reserves, however, Peru's guano was considered to be the best for farming.

Guano is made up of bird droppings amassed over hundreds of years due to weather and ocean currents. What distinguished Peru's guano from guano found at other sources around the world was due to the unique weather conditions found along Peru's coast. Because of the Humboldt or Peruvian Current, which flows cold water from Antarctica to the equator along Peru's coast, this creates an interesting weather pattern where the cold water and warm air prevents the fall of rain in this part of the world. Due to the lack of rain on the islands along Peru's coast, the accumulated bird droppings are baked in the dry atmosphere which preserves the nitrates in those droppings from evaporating, thus maintaining its effectiveness. Another factor that made guano an effective fertilizer was that its contents originated from fish-eating birds.

The enormous fish reserves, consisting primarily of anchovetas, have drawn a huge migration of birds and seals to these islands. Because of there relative isolation from natural predators, the guano producing birds settled on these islands and raised their young there. Over the course of hundreds to thousands of years and favorable weather conditions already explained, these birds had accumulated guano reserves as 100 to 150 feet deep. Three types of birds are the primary producers of guano, they are the white-breast cormorant, the gray pelican, and the white-head gannet or piqueros. It has been estimated that these birds, around a million can reside on one island, can create over 11,000 tons of guano a year.

Guano has been an international commodity for almost 200 years. Because of the improved crop yields that guano produced for farmers, guano became a heavily sought after commodity. Foreign traders, especially the British, set up trading houses to ship guano back to England and Europe for trade and distribution. The Americans also found guano to be valuable in increasing American crop yields, and permitted American traders to help the U.S. government acquire islands in the Pacific and the Caribbean to ensure American reserves under the U.S. Guano Island Act of 1856. Due to the British monopoly of Peruvian guano, the U.S. Congress passed the guano act to help American companies compete within the guano market and to keep guano prices low for American farmers.

American entrepreneurs were given the power to claim guano islands in the Pacific and the Caribbean in the name of the U.S. government. Around 60 islands were acquired or claimed under the Guano Island Act like Pacific islands such as Howland, Baker, and Jarvis islands, and Caribbean islands like Serranilla Keys, Navassa, and Petrel islands were held and later released from U.S. control when the need for guano had diminished during the 20th century. As the 19th century came to an end, and artificial fertilizers were developed, guano became less important and countries like Peru suffered from economic decline and acquired deep debt from years of mismanaging and misusing of its guano funds.

During the height of Peru's golden age of guano, around 1840 to 1880, it has been estimated that the Peruvians excavated over 20,000,000 tons of guano for export, creating around $2 billion in profits. However, by 1909-10, Peru's guano reserves were severely depleted and could only yield around 48,000 tons of guano a year. Therefore, since 1909, the Peruvian government has taken steps to conserve its guano reserves by establishing the Guano Administration to better manage their guano reserves by preserving the guano birds and their environment.

Conservation measures include setting the islands off limits to guano companies for half a year to allow the birds to reaccumulate their guano reserves and to safely raise their young without having much disruptions from human activity. Another measure has been controlling the commercial fishing industry and setting fishing quotas to preserve the fish reserves for the guano birds to feed on and allow them to maintain their populations at a sufficient level. Lastly, a key measure has been to set up park preserves on the mainland where some birds migrate and to give them safe haven from predators. These measures have allowed Peru to continue to use guano for its own agricultural use in recent decades.

Another emerging threat that could destroy the unique weather conditions of Peru's guano islands is the warming of the earth's oceans. Due to the ocean warming and weather phenomenon in the Pacific called El Nino, the warmer waters have disrupted the ocean's eco-system within the Humboldt or Peruvian Current and killing off the fish in that area.

If fish reserves fall drastically, this could affect the bird populations and ultimately lead to a sharp reduction in guano accumulations, thus harming Peru's economy. Furthermore, in today's world, fish, bird, and seal populations are not the only native life that may suffer because of guano. Just like Peru, some islands are still dependent on it for survival as a tradable commodity. Island governments in particular maybe willing to sacrifice the animal populations for the well-being of the human populations that have emerged or have grown over the decades. Therefore, while the importance of guano maybe in the past, its impact may have a lasting effect on both the animal and human populations that still depend on it for its survival.

3. Duration: 1850s

In early 1996, Mr. Bill Warren of San Diego calimed Navassa Island under the 1856 Guano Act. Navassa is located 25 miles off the west coast of Haiti and Warren's interested was in looking for sunken treaure. Navassa lies along a key route used by Caribbean priates between the strongholds of Tortuga and Point Royal. Navassa also contains 1,156 acres or guano at least 20 feet deep that can sell to ogranic citrus farms in Florida fro $400-600 per ton.

4. Location

Continent:South America Region:Weatern South America Country:Peru

5. Actors: USA, UK, Peru

II. Environment Aspects

Claimed in 1856, Navassa was abandoned in 1889, when 150 black miners revolted and killed the white managers of the oepration. In 1916, the U.S. Coast constructed a light hosue. At that time, the island was home to 30 pound igaunas and goats "as big as ponies." The goats were left off by pirates in 1660s. In 1929, the light house was mechanized and humans left the island. The State Department has created an inter-agency committe to study the claim. (Gugliotta, 1996)

6. Type of Environmental Problem: Habitat Loss

Habitat loss is an issue because of the lack of measures to regulate the guano trade, the guano birds' habitats were seriously affected as their existence was at risk with the destruction of their nesting areas. However, by the 20th century, measures were taken to preserve the guano birds and their habitats by limiting the amount of guano that is exported and the amount of fish that is caught to ensure a stable food supply for the guano birds.) Industry output in 1920 was 11,400 tons, equal to $500,000 (1920 dollars).

7. Type of Habitat: Ocean

8. Act and Harm Sites:

III. Conflict Aspects

9. Type of Conflict: WARTHREAT

During the 19th century, the guano trade was extremely competitive between the United States, and Peru had few restrictions in trading of guano. The United States claimed islands in the Pacific and the Caribbean to keep guano prices down for American farmers. However, when Peru's guano ran out, Peru was no longer seen as a significant economic power and put up restrictions to excavating guano, therefore slowing down its trade of guano, but still allowing the trade of guano.

10. Level of Conflict: WARLOW

11. Fatality Level of Dispute: 0

III. Environment and Conflict Overlap

12. Environment-Conflict Link and Dynamics: Direct

Causal Diagram

13. Level of Strategic Interest: Multilateral

14. Outcome of Dispute: Stalemate

IV. Related Information and Sources

15. Related ICE and TED Cases

Falklands Islands Conflict

Diayou Islands Conflict

Spratly Islands Conflict

16. Relevant Websites and Literature

Coker, R. E. "Peru's Wealth-Producing Birds." The National Geographic Magazine (June, 1920): 537-566.

Gottenberg, Paul. Imagining Development. Berkeley: University of California Press, 1993.

Green, Marilyn. "The Ballestas, Peru's Richest Islands." Oceans (May-June, 1986): 48-51+.

Guy Gugliotta, "Dropping Anchor to Claim Fortune in Government Guano," Washington Post. 11/12/1996, A15.

Murphy, Robert Cushman. "Peru Profits from Sea Fowl." The National Geographic Magazine (March, 1959): 395-413. Skaggs, Jimmy M. The Great Guano Rush. (New York: Saint Martin's Press, 1994).

November, 1997

Some amterials from a draft case study by Casey Quan