Two Models of Land Reform
and Development - Brazil

by Jeffrey Frank

Z magazine, November 2002


Located on green rolling hills, the farm with its fields of grain, milking barn, chicken hatcheries, pig barns, storage sheds, and granaries could be located in any Midwestern state. Even its location, near Porto Alegre, Brazil would not differentiate this farm from a typical family farm in the United States. However, this farm is different as it was founded by occupying and expropriating, through a decade of struggle against both the Brazilian federal government and one of the largest land owners in Brazil, a portion of one of the largest landed estates in Brazil by brave men and women led by the Movimento do Trabalhadores Rurais Sem Terra (Movement of Rural Landless Workers or MST).

Guided by the slogan "Occupy, Resist and Produce," the MST initiated a direct action model of land reform wherein landless peasants occupy an unproductive parcel of land, petition the Brazilian government for land rights, and operate the settlement as a collective enterprise. This model of land reform is now being challenged b the World Bank's attempts to solve the immense landless problem in Brazil by using "market mechanisms" to purchase land directly from the owners by the landless and then to force peasant families to survive in the global agricultural market. The outcome of the struggle between these two models of land reform is not at all certain. What is certain is that the result will impact Brazilian land reform for many years to come.

Need for Land Reform

At the end of the military dictatorship in 1985, Brazil adopted a constitution that allows for the expropriation of large land holdings that either do not fulfill a social function or are considered unproductive. With the election of the first civilian government in 20 years, there was substantial hope for land reform in keeping with the new constitution's expropriation provisions. However, such hopes were soon dashed as the government, beholden to large land owners, failed to enforce the law. Wanusa Pereira dos Santos, a member of the MST's National Political Education Committee states, "While this law [the constitution] does not give land reform in the way the social movements want or Brazil needs, it would be a big step if the government just upheld the law."

No party-the Brazilian government, social movements, politicians of every political tenet-seriously contests the need for land reform. Brazil has the second highest concentration of land ownership in the world. Furthermore, land concentration has increased as the number of small farms has been reduced from three million in 1985 to less than one million today. The MST estimates that over 60 percent of the farm land in Brazil is idle, while 25 million peasants struggle to survive.

Origins of the Movement

Due to the intransigence of the Brazilian government, it has been the task of the social movements to force the government to observe its legal obligations regarding land reform. According to Peter Rosset, co-director of the Institute for Food and Development Policy (Food First), "Land expropriation is something the government would be unlikely to do on its own, but with a well organized social movement, by finding land that meets those conditions [required by the Brazilian constitution] and occupying it to force the government to act, [land reform] works quite well."

The MST was formed in 1984 and, with activists from other land reform organizations, soon began land occupations in southern Brazil. In conjunction with allied organizations, the MST has led land occupations where more than 350,000 families have gained access to land consisting of over 15 million acres.

MST's militancy in land reform has not come without a price. During the period from 1985 to 1999, 1,158 MST and other rural activists were assassinated. During the period from 1985 to 1996, the Catholic Church's Pastoral Land Commission also documented 820 additional assassination attempts and 2,412 death threats against MST activists and rural workers. Through 1999, only 56 people were ever charged with respect to these crimes and only ten have been convicted.

The violence directed against land reform activists is largely the result of actions by the federal police and thugs hired by large land owners with the support of the Ruralista Party (the land owners' party) and the current Brazilian government of Fernando Henrique Cardoso. The relative impunity of those engaging in these violent acts, due to the support of the Brazilian elites, has only encouraged more violence.

MST Model

The MST encampment is located off the main highway running from Rio de Janeiro to Sao Paulo, on a rutted, dirt road, known by its inhabitants as Terra Prometida (Promised Land). The settlement consists of various homes, an open-sided community center/dining hall, communal kitchen with a fire pit used to cook food in large metal pots and a table made of tree limbs, a "pantry" holding the dietary staples of rice, beans, dried manioc root, and a "pharmacy" holding basic medical supplies such as bandages and disinfectants and a few herbal and traditional medicines. The structures, with roofs and walls made of black plastic framed with tree branches, cut from the nearby woods, and dirt floors, are typical of an MST encampment. Antonio Jamero, one of the camp leaders, tells the story of the camp's 94 families. This process of occupying land has been repeated hundreds of times throughout Brazil. In the case of the Promised Land, most families had been farm workers who lost their jobs and drifted into the slums of Rio de Janeiro.

The MST met with them and began approximately six months of education in farming techniques, cooperative organization and marketing, and health and sanitation, as well as fundamental literacy. The initial occupation of a parcel near the Promised Land ended when the National Institute of Colonization and Agrarian Reform (INCRA), the federal agency responsible for land reform in Brazil, determined that the land did not qualify for expropriation because its lack of productivity could not be proven. The land owner, in order to avoid expropriation, trucked in cattle the night

prior to each INCRA inspection to prove the land's productive use. After being forced from the first camp, INCRA moved the group to a roadside ditch for six months without adequate food, shelter, sanitation or drinking water. Subsequently, the group was brought to the Promised Land, where they have lived for over a year. Until the land has been expropriated in a court proceeding, they are not allowed to farm. Even though hunger is a constant problem, the fields next to them are empty of crops. The landless settlers anticipate being in this distressed condition for some time while their case winds though the courts. Even a victory in court would not allow expropriation of the land if INCRA does not have funds for land purchases or agricultural development.

Typically, a land occupation is preceded by a substantial amount of preparation including agricultural training. Once the occupation begins, the MST applies to INCRA to certify that the land qualifies for expropriation. According to Sergio Sauer, a former coordinator and advisor for the Pastoral Land Commission and currently an aide to a federal senator of the Partido Trabalhadores (Workers Party), once a decision is made to expropriate a parcel of land, INCRA is responsible for everything-all legal and economic procedures. INCRA issues a 20-year bond to the land owner, as the MST model is not without compensation, although the purchase price is usually set below market price. INCRA also funds production credits once the landless have won land rights. Rosset cautions that "the INCRA model would not work without the MST. Before the MST, INCRA did nothing. "

The Porto Alegre settlement, begun much like the Promised Land encampment, was first occupied in 1989. The occupation met fierce resistance from the land owner who sent in crop duster airplanes to spray the occupiers with chemicals, resulting in the deaths of three children. The police and hired thugs attacked the settlers with bayonets, tear gas, and firearms, and even tied several of the settlers to the tops of ant hills. These battles culminated in the death of a landless settler when the federal police attacked a peaceful demonstration for land rights in Porto Alegre. Thereafter, the settlers attained the right to settle on and farm the land.

Occupying the land and resisting the federal government and the power of the large land owners only partially fulfill the MST slogan: "Occupy, Resist and Produce." The settlement in Porto Alegre, like most MST settlements, is structured to survive in the market conditions imposed on Brazil by the neo-liberal economic model adopted by the Cardoso administration.

Cooperative Production: Typical of an MST settlement, the Porto Alegre settlement is organized on a cooperative basis with families sharing resources. The farm work is shared, as well as other tasks such as child care, education, and communal cooking. Additionally, most of the agricultural produce not consumed by the settlement is marketed through MST cooperatives. The settlement contributes 2 percent of its profits to the national MST to help fund other MST occupations and activities.

The MST currently maintains 400 cooperative associations for production, trade, and related services in the settlements. Through the National Association of Cooperatives (created by the MST), the MST has also established 49 cooperatives, employing 20,000 families, for meat, dairy, and other agricultural products. The MST has also established 32 service cooperatives, two regional marketing co-operatives, and two credit cooperatives. The cooperatives had sufficient earnings to finance 167 land appropriations in 1996.

Education: Immediately after constructing housing, the Porto Alegre settlement established a school for their children. The settlement school teaches values important to the members, which they describe as humanist values-development of the person as a whole rather than just particular aspects and skills. The MST settlements currently maintain 1,200 elementary schools with 3,800 teachers and an enrollment of 150,000 children and over 250 day care centers. Additionally, 1,200 MST educators teach literacy classes to 25,000 adults. The MST also maintains an institute for training teachers and assists individual students in entering universities.

Division of Labor: The settlement strives toward equality of the sexes and avoids a division of labor based on sex. Men and women work in all sectors of production, including the communal kitchen and day care. The MST has tackled what it calls the gender issue on all levels of its organization. At the national level, 10 of the 22 members of the national coordinating committee are women.

Environment and Ecology: The members of the Porto Alegre settlement seek to maintain the MST principle of using farming techniques that won't spoil the land. For example, they produce about 1,500 tons of rice per year. In the past, they have used pesticides in order to increase production, but now grow about 50 percent of the rice organically. The settlement is in the process of debating whether to continue using pesticides in order to produce more rice or produce smaller quantities of organic rice. Nationally, the MST, in response to the widespread pollution and environmental devastation in Brazil, created the National Collective on the Environment to advance MST policies and programs on sustainable organic agriculture.

Additional Programs: The MST settlements also have health care programs (training health care agents, programs for the prevention of AIDS and sexually transmitted diseases and for medicinal herb), cultural programs (music, dance, poetry, and literature) and communications (newspapers, community radio stations, and websites).

It is apparent from the Porto Alegre settlement that the inhabitants enjoy a higher standard of living than Brazil's millions of landless peasants or urban slum dwellers. Research from the United Nation's Food and Agricultural Committee indicates that, after two years, a settled worker's standard of living increases 350 times over that of a landless worker. The infant mortality rates in settlements in the southeast of Brazil are comparable to those in developed countries.

New Rural World

The Cardoso government, faced with the reality of the MST model of land reform, announced its own, new agrarian policy titled Novo Mundo Rural (New Rural World) in 1998. The aims of this new policy are to change land reform into a compensatory policy rather than develop an all-encompassing land reform model, decentralize land reform by shifting responsibility from the federal to the state governments, and change land reform from a people's movement to an exchange of commodities by instituting market-based land reform (MBLR). In reality, the New Rural World is drawn directly from the World Bank's play book.

The MBLR programs do not allow the landless to purchase land directly. In theory, the landless and small farmers form an association, which then negotiates the purchase of a parcel of land. If a government review of the land purchase price, land conditions, and the families in the association is positive, a private Brazilian bank will pay the owner, using funds provided by the World Bank, Brazilian federal government, and other sources to the MBLR program. However, the reality is substantially different from this theoretical model.

According to Klaus Deininger, a principal World Bank land reform official, in remarks to a recent Washington, DC seminar on the negative impacts of World Bank market-based land reform, the stated goal of the MBLR is to reduce rural poverty, which the World Bank believes "is the result of land concentration due to the inefficiencies of the land markets." According to the report "A Ticket to Land," authored by Sauer and prepared for the seminar, "The agrarian problem is not seen as one of access to land but of market security and effectiveness.... "

Deininger claims that the MBLR model (1) replaces central bureaucracies with local authorities by decentralizing land reform, (2) is demand rather than supply driven, (3) is faster, (4) is less confrontational than the MST model, and (5) is cheaper, as its beneficiaries have the capacity to negotiate land prices.

Impact on Agriculture

Any analysis of MBLR must be made in the context of the wholesale adoption of neo-liberal economic policies by the Cardoso government. According to the MST, these neo-liberal policies include opening Brazilian markets to imports; attracting foreign capital by maintaining high interest rates; privatizing government enterprises such as oil and natural gas production; and dismantling the role of the government in the economy

and eliminating, scaling back or privatizing social services such as education, transportation, and health. The neo-liberal economic policies and structural adjustments have had a particularly devastating impact on Brazilian agriculture. While these adjustments have impacted all segments of agriculture, small farmers have been inordinately affected. According to Rosset, "beginning in the 1980s, the structural adjustments for Brazil included opening the Brazil markets to cheap imports from abroad, which means that the prices farmers get for crops had gone lower so they can't make a living, privatize extension, privatize commercialization of small products that farmers produce, and privatize credit so that [farmers] can no longer get subsidized credit from commercial banks."

The Brazilian government, as part of structural adjustment, has been forced to substantially reduce agricultural subsidies just as the developed world has increased governmental agricultural support through tariffs and price subsidies. The recently enacted U. S. farm bill provides total subsidies for price support of $190 billion over a I O-year period, an increase of approximately 80 percent over the prior period. These subsidies primarily benefit corporate agri-businesses and large farmers.

The MST has summarized the effect of the neo-liberal policies on Brazilian agriculture as a decrease in agricultural spending from $19 billion per annum to $4 billion per annum; a decrease in agricultural subsidies to nothing; bankruptcy of 400,000 farmers in the first two years of the Cardoso administration; exodus of four million rural Brazilians to the cities; rural credit default increases of 182 percent in the 1997 to 1999 period; and zero growth in agricultural production from 1994 to 1999.

These IMF-mandated adjustments will continue even if the Workers Party candidate, Luiz Inacio Lula da Silva (Lula), wins the October Brazilian presidential election. The IMF required, as a condition to a $30 billion emergency loan, the presidential candidates agree to continue the imposed structural adjustments.

Market Based Land Reform

Members of land reform organizations from around the world gathered for the seminar to present case studies on the performance of MBLR in Brazil, Guatemala, Columbia, Thailand, and South Africa. The Brazilian case studies, independent of both the Brazilian government and the World Bank, were conducted by scholars and university professors in the five states where the World Bank initiated MBLR programs.

The MBLR model posits that the land reform process is under the control of the landless. However, independent case studies clearly indicate that associations are not voluntarily formed by the landless, but are rather the product of local governmental authorities and land owners wishing to sell land. Leaders are often imposed on the associations from the outside. A majority of the persons interviewed said they had little participation in decisions such as what crops to grow or investments in equipment or animals.

Independent studies also found that most of the negotiations for land purchases were between land owners and local and state authorities, who are substantially more susceptible to influence and corruption, particularly in rural areas dominated by large land owners. The Ruralista Party, a creation of the large land owners and a principal ally of Cardoso's political party, discourages authentic negotiations through its influence on local and state officials. Finally, since the land market in Brazil is underdeveloped there are few sales to determine market prices. The independent studies concluded, as a result of these factors, that 100 percent of the negotiations to purchase land were conducted by government employees rather than the landless.

All of the studies indicated that the participants also had little or no knowledge of how the MBLR programs functioned. Not one of the participants interviewed knew all the terms of the loans they had incurred to purchase the land. Fewer than one percent knew the interest rate of their loans, and fewer than 10 percent knew the land was security for the loan.

The studies also found that the land put on the market is frequently poor quality land that the owner has been trying to dump for years. Often the participants (or their "representatives") will take the first parcel offered to them, notwithstanding price or quality.

Those associations that operate the farms as collectives actually pay the "members" a daily wage, undermining the entire purpose of land ownership. Since the associations are typically run by government officials and directly influenced by large land owners, using association funds to pay labor thereby reproduces the same type of rural exploitation of landless workers that land reform is supposed to correct. The independent studies indicate that the process does not develop the landless workers' abilities to manage their lives or develop the necessary skills to successfully compete or even survive in the neo-liberal marketplace.

MBLR is also supposed to decentralize the process of land reform. In reality, the process is "defederalized," with responsibility shifting from the federal to the state and local governments, which are more susceptible to control and pressure by the large land owners directly and through the Ruralista Party.

MBLR becomes a program that is not "market based" in any sense of the concept. The associations, land purchase negotiations, investment decisions as to land to purchase, crops to grow, infrastructure to develop, and terms of the loans to acquire land are all controlled by state and local government employees subject to influence and manipulation by local elites.

What has been the result of MBLR? First, all of the surveys indicate that 100 percent of the persons interviewed will be unable to make their first loan payment. As Rosset explains it, "You have poor people taking out huge loans to buy over appraised land of poor quality. Then they are supposed to take additional loans to get into the export crop markets, which are highly risky. It just seems as if it is a disastrous way to do land reform. "

Second, few families appear to have improved their quality of life. The surveys indicate that few families produce crops for either the local or international markets and most consume their harvests for survival. "A Ticket to Land" concludes "that very few families earn enough to eat and survive. Most don't harvest enough to feed their families, much less to save money or make a reserve for their loan payments" (emphasis in the original).

Third, contrary to the World Bank claims, MBLR is more expensive. In Brazil, during the period MBLR projects have existed, 30 percent of the total funds spent on land reform were spent on the MBLR projects. But MBLR only managed to transfer 10 percent of the total land transferred in land reform and 13 percent of the total families settled during that same period.

In addition, because the land is paid for in cash, rather than bonds, the immediate cash outlay by the government is substantially greater, increasing the total Brazilian external debt.

Fourth, the World Bank and Cardoso government claim that MBLR reaches more beneficiaries taster than the occupation and expropriation model. However, even under the best case scenario, MBLR programs would reach only about I percent of the number of landless persons who need land reform in Brazil. During the years since MBLR has been implemented, substantially more people have left rural areas for the cities than were settled on farms. So, even with all the money the World Bank is willing to pour into land reform, it would take substantially longer to make a dent in the landless problem than the MST model.

Since MBLR is expensive, slow, unable to reach many landless people, and unable to empower its beneficiaries, why is it being promoted by the World Bank and Cardoso government?

The reality of MBLR belies the World Bank's position that MBLR is meant to be complementary to government programs and the social movements and not a substitute for the expropriation model.

Under Brazil's budgetary constraints, funds advanced in support of MBLR result in a direct reduction of INCRA's budget which is necessary for the MST model to work. INCRA's budget has decreased by 53 percent over the last few years. As Sauer points out, "by pulling funds from INCRA to the market programs, there is a negative effect on the social movements." With no funds for occupations and expropriation, much less post-expropriation production credits and technical assistance, there are 500,000 people in MST encampments awaiting settlement.

It is highly unlikely that the negative impact of MBLR on the MST model of land reform is coincidental. As concluded in a report prepared by the Environmental Defense Fund, "Whatever else it may prove to be, MBLR is an effective source of support for local and regional interests ideologically opposed to the MST and organizations aligned with it, to counter MST organizing and potentially undermine its membership base at a local level."

Members of the land reform social movements believe that the World Bank's recent involvement in land reform after 50 years in Brazil is solely due to the MST's position as the principal political opponent to Cardoso's neo-liberal policies. One can only conclude that for the Brazilian elite, MBLR is a political weapon to crush its opposition, notwithstanding the negative impact on land reform or Brazil's poorest citizens.

By adopting a MBLR model that is far more costly and less effective than the MST model, the Brazilian government forgets, or does not care about, the hundreds of thousands of landless people languishing in encampments, lacking the basic necessities of food, water, shelter, and sanitation. For the residents of the Promised Land, the frustration is palpable. Jose Pio, a resident of the Promised Land who has been fighting for land reform for 25 years, says, "It is a crime to have so many hungry people in Brazil. We are next to some of the richest land and the government won't let us farm it." When asked why he endures the harsh conditions of the encampment, with little hope on the horizon of gaining land rights, he replies as poor men and women have for hundreds of years, "I struggle, I fight because I love my children. "

It is unconscionable that the model of land reform and development least likely to allow him to help his children may win out over the MST's proven model.

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