Poverty alleviation through access to land: the experience of the Brazilian agrarian reform process^[6] - J.E. da Veiga^[7]

Full Professor, Department of Economics, University of São Paulo, Brazil

Brazil has not undertaken, is not undertaking, nor will be undertaking a real agrarian reform. It could be argued that the almost 20 million hectares transferred to hundreds of thousands of families settled during the two terms of President Fernando Henrique Cardoso finally broke the century-long delay of the Brazilian agrarian reform. Nevertheless, figures show that only 8 percent of the area then controlled by 785 000 fazendeiros was transferred to the family sector, increasing the area of its 4 million farms by 15 percent. Family farmers had 37 percent of the agricultural land in 1995 and 42 percent eight years afterwards. There will continue to be demand as well as pressure for the opening of new settlements. New governments will continue to favour settling more farm workers. This type of policy exists in different countries elsewhere in the world, even in those that carried out massive agrarian reform in the nineteenth and twentieth centuries. Settlements are certainly a necessary, but not sufficient, condition of agrarian reform - especially when they are established gradually. Nevertheless, they still represent a powerful measure for poverty alleviation.

INTRODUCTION

Brazil is one of the most shocking examples of opting for corporate farming or, as Binswager (1994) puts it, of opting for a "premature expulsion model" of the workforce from agriculture; that is, of disregarding and showing intolerance towards family agriculture. Except for the colonization movement that started in the southernmost part of the country and extended as far as the southeastern region of the State of Paraná, the agrarian pattern in other regions was based on characteristics similar to Eastern European ones, where landowners preferred to block the rural population from having access to landownership.

Strictly speaking, Brazil's agricultural system began to emerge with the coffee plantations in the late nineteenth century. Before then, agricultural and husbandry activities had not consolidated into any type of integrated system. Moreover, the way the elite abolished slavery and imported immigrant settlers to work the coffee plantations had the same historical sense as Eastern Europe's "second servitude". A strong pact was formed to bar Brazilians of African origin, and European and Japanese immigrants from owning land. Only after the 1929 crisis and the long depression that followed were some immigrants able to buy land lots from some bankrupt plantation owners. At the same time, a great population surplus had formed that started to pressure the government for access to land. Starting in the early 1960s, the northeastern "peasant leagues" and the southern "landless movements" almost caused the government to opt for family farming.

Throughout 20 years of military dictatorship, the answer that the agricultural population surplus found was to migrate, mainly to frontier regions, where people could settle as squatters. However, the employment policy of the country's western territory, basically working with fiscal incentives, reduced the scope of this escape valve. Moreover, choosing sugar cane as the only crop in the subsidized alcohol production programme (Proálcool) helped large farmers advance even further into the family farms of the southeast. In the mid-1980s, when the country started its transition towards democracy, the Brazilian agricultural system stood in stark contrast with those of countries that were able to develop throughout the twentieth century. However, the process of re-democratization increased agricultural workers' chances of gaining access to a plot of land that would provide their basic needs (food and housing), and perhaps even more if the workers had access to essential public goods (such as education and technical assistance), as well as adequate credit lines.

No one knows how many of those who migrated to the western region during the military dictatorship were able to acquire farmland. It is only possible to say that the official "colonization" programmes during that 20 - year period reached only 115 000 families (an average of 5 500 families per year). This number is equivalent to the number of families settled by the governments of the different states in the first ten years of the re-democratization process, while the Instituto Nacional de Colonização e Reforma Agrária (INCRA - National Institute for Rural Settlement and Agrarian Reform) settled a few more. That means that the chances of a landless family being settled were four times greater between 1985 and 1994 than during the dictatorship. This performance improved further during the two terms of the Cardoso administration.

Cardoso's first term as president started with a serious economic crisis in the agriculture sector as a result of the perverse indebtedness of many farmers. In mid- 1995, rural Brazil had an open wound: non-payment levels in excess of 30 percent. After a tense period of inaction - caused by the obvious lack of confidence, in economic terms, in Minister of Agriculture, Andrade Vieira - the problem was resolved thanks to help from the hegemonic party among the big landowners (the Brazilian Progressive Party - PPB) in the so-called bancada ruralista. This political ability of the group more to the right of the government's support group was consecrated in Cardoso's second term by the excellent performance of one of the federal government's oldest machines: the Ministry of Agriculture. President Lula inherited an agricultural situation that was diametrically opposite to the bottleneck situation of 1995.

The beginning of Cardoso's first term was also dramatic in terms of its dealing with situations known as "social conflicts in the countryside". Two terrible slaughters in Carajás (State of Pará) and Corumbiara (State of Rondônia) were necessary before political support leaders concluded that the agrarian problem could no longer be handled by obscure engineers unable to receive from Congress, economic ministries and the President, the measures indispensable to the fulfilment of the commitment signed during the 1994 elections. This context produced the Jungmann phenomenon, a former member of the communist youth organization who was running the federal environmental protection agency (IBAMA), after having acquired broad operational experience in various posts at the Ministry of Planning. He conducted a real turnaround, which today can be appreciated based on the initial performance of the brand-new Ministry of Agrarian Development on at least two fronts: (i) the strengthening of family agriculture, through supplying specific training skills, technical assistance, infrastructure, subsidized credit and commercial channels; and (ii) the expansion of this category by settling former landless rural inhabitants, squatters, land tenants and very small landowners through different types of settlements.

Unfortunately, this agricultural and agrarian success, the legacy of the socalled "FHC (Cardoso) Era", was not very well assimilated by the social bases of the Workers' Party (PT), the party of the current president Lula, the Movimento dos Sem Terra (MST - the landless workers' movement) and the Confederação Nacional dos Trabalhadores na Agricultura (CONTAG - National Confederation of Agricultural Workers). This is where there is a risk of backsliding. However, the government may choose an alternative platform, one involving the participation of a vast multiparty group of scholars, employees, tradeunionists, non-governmental organizations (NGOs), mayors' associations, and representatives of micro-enterprises and small businesses: the Plano Nacional para o Desenvolvimento Sustentável do Brasil Rural (PNDRS - National Plan for Sustainable Development of Rural Brazil). The third version of this plan was approved by the respective council, the Conselho Nacional de Desenvolvimento Rural Sustentável (CNDRS - National Council for Sustainable Rural Development) in November 2002 after being discussed in July with specialists of at least ten organizations: the Inter- American Development Bank, the World Bank, FAO, the International Fund for Agricultural Development, the United Nations Development Programme, United Nations Educational, Scientific and Cultural Organization, the European Union, the United States Agency for International Development, the Economic Commission for Latin America and the Caribbean, and the Inter-American Institute for Cooperation on Agriculture. This plan advocates deepening the two programmes already consolidated in the last two years - agrarian reform settlements and Programa Nacional de Fortalecimento da Agricultura Familiar (PRONAF - National Programme for Strengthening Family Agriculture). Furthermore, the plan urges the next government to consider essential the emergence of two other programmes, which are critical to the progress of Brazil's rural areas: renovation of education and economic diversification. It is now necessary to think about rural development, which goes beyond agriculture and husbandry activities.

Settlement policy

Until 1995, there was no federal policy to give family farmers access to credit, training skills, technical assistance, extension services, commercialization and essential infrastructure. Agrarian interventions were sketchy and insufficient to fight plantations that did not comply with their social function. Some of the conflicts were resolved without addressing the real demand for democratic access to landownership. Thus, by the middle of the 1990s, an important historical turning point had been reached. With the new dynamics acquired by the settlement policy and the rise of the PRONAF, there was a clear advance. However, the need to provide immediate answers to the historical demands caused the implementation of these two policies to suffer from a lack of: (i) integration; (ii) definition of priority areas; (iii) proper links between land and agriculture; and (iv) dialogue and coordination between agriculture and the other sectors of rural economy. In addition, there was the need to combine all these aspects with local and microregional evolution processes while implementing these two policies. Nonetheless, in four years, about 280 000 families of rural workers were settled. Moreover, the PRONAF totalled more than 1.5 million operations that benefited family farming, as well as investments in city infrastructure.

By evaluating the results obtained up to 1998, it became clear that there was a need for changes geared to more integrated action between the two policies and their future insertion in a truly sustainable development strategy. As the most obvious consequence of a settlement policy is the emergence of more family farmers, a greater coordination with the PRONAF was also imposed. Two credit lines were then unified in the first semester of 1999, with the extinction of the Programa de Crédito Especial para as Áreas de Reforma Agrária (PROCERA - Programme of Special Credit for Agrarian Reform Areas) and the creation of a credit line called "PRONAF A", exclusively for agrarian reform settlers, while credit lines "PRONAF B, C and D" were aimed at other family farming categories.

To operationalize this change, the Ministério do Desenvolvimento Agrário (MDA - Ministry of Agrarian Development) was established, encompassing agrarian reform policy and the PRONAF, formerly among the duties of the Ministry of Agriculture. It was also during this period that the CNDRS emerged with the mission of planning the future of rural Brazil. The CNDRS was composed of representatives from nine federal government ministries, nine entities of "civil society", and a few other ambivalent institutions.

Although aware that the expansion and strengthening of family farming required innumerable integrated actions, the newly created MDA concentrated its efforts on three main issues:

• settling families through various agrarian actions (mainly expropriation, acquisitions, public land and agrarian credit);

• supplying cost and investment credits for family farmers;

• transferring federal resources to municipal governments that have a significant concentration of family farmers in order for investment in infrastructure through plans approved by the Municipal Rural Development Councils (CMDR).

Besides creating the National Agrarian Reform Programme, the MDA also created two other - and very recent - federal intervention tools to promote access to landownership: the Fundo de Terras e Reforma Agrária (Agrarian Reform and Land Fund), called "Banco da Terra", and the Credito Fundiário (Agrarian Credit) called "Cédula da Terra". These are two new ways of allowing the acquisition and transfer of property that could not be expropriated through traditional means, as they are either in accordance with their social role, or have an area smaller than the minimum 15 modules (750 ha). It is estimated that the idle areas alone in very small properties correspond to 40 million ha.

It should be emphasized that the agrarian reform actions - except for policies developed by the Banco da Terra and Cédula da Terra - do not meet the needs of those farmers who do not own enough land, and therefore need to increase their productive area in order to become truly viable family production units. There is still a need for complementary actions dealing with agrarian regulation. Areas offered in the rural land market by farmers who leave their occupation (generally those retiring without heirs) are usually acquired by businessmen, lawyers, doctors, etc., or even by large farmers without offering a purchasing option to those who need this type of resource most: neighbouring family farms, which are usually headed by dynamic youths starting their career. Society would certainly gain a lot more if there were some means of increasing the chances of these properties being transferred to rural youths.

Between 1995 and 2001, almost 20 million ha of land were obtained, half through expropriation, as the properties did not comply with their social function as foreseen by the Federal Constitution, and the other half through acquisition and land credit programmes. In this period, the National Agrarian Reform Programme's budget reached a value of about US$5 000 million (April 2003 exchange rate). These investments in actions of land acquisition, installation and consolidation of settlements contributed enormously to reducing social conflicts and, as a consequence, the number of violent events and deaths resulting from land disputes.

For each settled family, the Cardoso administration invested heavily in infrastructure and land acquisition. However, this high expense for land resources decreased slowly as the scale of the programme increased, finally reaching about US$4 000 per family. As each family establishment employed 3.7 people (1995/96 census), the cost of creating a job in agrarian settlements was cut by more than half. No other type of public investment of a comparable amount was able to create so many new opportunities for income generation, nor was any other type able to distribute so many assets.

Table 1
Brazil's agrarian profile, 1995 - 2000

Nevertheless, it is necessary to compare the total area of settlements with the total area of farms and ranches, and the number of settled families with the number of families who already had access to land. The almost 20 million ha of settlements established throughout the eight years of the Cardoso administration correspond to 5 percent of the total area of farms and ranches counted by the 1995/96 census. In other words, the programme transferred 8 percent at most of the enormous area controlled by 785 000 corporate farmers to agricultural families made up of more than 4 million small farms and ranches. Through this action, the area of family farms must have increased by about 15 percent, as the estimate indicates in Table 1.

The most unbiased and detailed balance of the agricultural and agrarian policies of the Cardoso administration made by Malin, editor of the magazine Update, from the American Chamber of Commerce of São Paulo (www.amcham.com.br), concludes: "Fernando Henrique (Cardoso) made a settlement policy he calls agrarian reform, with which he avoids a political explosion and attempts to attack the crucial matter of social inequality. The right wing thinks the President is lenient with all the commotion, and wastes money. At the same time, the government renegotiates the big farmers' debts and allows agribusiness to reap the rewards of its competence. The left wing Source: Author's estimate based on the 1995/96 Agricultural Census. finds therein the proof that Fernando Henrique is working for the right wing, and thus tries to disqualify the agrarian settlement policy. These two opposing perceptions do not work. Taken to the final consequences, the policies that they assume would lead to a catastrophe. It would not be the productivity, the harvests, or herds that would increase in the countryside, but rather confrontation, violence, and despondency. And Brazil would retreat on a terrain that is increasingly more important to its development." (Malin, 2002, p. 211)

Methods

Settling agricultural families is guaranteed by the utilization of various instruments for obtaining land that have responded more to social demands than the needs of economic viability, which involves the availability of quality land at low cost. Among the main tools are:

• expropriation by social interest;

• gathering of public land (mainly in the northern region), as a means of incorporating useful land up to then without a specific destination;

• acquisition through purchase, as a way to attend to emergency necessities;

• vacancies in already established settlements.^[8]

As to the settlements, the following standards should be respected in principle:

• No settlement project should be created without the guarantee of resources for its implementation and consolidation which, on average, should occur within three years.

• Every family should be granted credit to support their settlement, the value of which should be up-to-date.

• Training should be offered to settlers throughout the first two years of the settlement's existence.

• The government should create a permanent rural housing programme.

• All basic infrastructure (roads, rural electric lighting and water supply) should have guaranteed resources before creating the settlement project, and its implementation should take no longer than three years.

Implementation of other actions regarding infrastructure and basic needs (health, education, sports and leisure) should be discussed and carried out in a combined action between the INCRA, other federal government sectors, and municipal and state governments, preferably before the creation of the settlement projects.

The following intervention tools are also essential to promoting access to land:

• recovery of illegal public land possessions through land regulation allowing ratification of small squatters' areas;

• demarcation (defining location), recognition, regulation, desintrusão (keeping the area free by reimbursing old inhabitants' improvements) and giving land titles to remaining quilombos^[9], which should be subject to public policies that encourage these communities to remain;

• conclusion of the demarcation and legalization of native South American Indian tribal land, with the guarantee that these groups have the right to use the natural resources in their territories (special conditions to access government policies should be guaranteed to tribal groups who live on lands already changed by human action and who survive by means of agricultural and/or extractivist activities);

• provision of simple and fast administrative title to possessions of five years or more;

• creation of "Resex" (extractivist reserves).

Deficiencies in rural surveying systems have been pinpointed as responsible for the difficulty in collecting taxes and in maintaining precise public records, in addition to facilitating fraud and illegal land possession. However, the necessary legal support to resolve these problems lies in the Public Registry Law. Furthermore, until recently, the high costs of land demarcation through conventional topography methods restricted the production of precise record maps. However, technological advances in information and satellite coverage now make it easier to obtain precise measurements and demarcations at an affordable cost. Thanks to more modern surveying methods and their use in land regulating processes, it is possible to discern institutional requirements that may enhance the performance of land markets in the future. Moreover, if applied efficiently, taxes could also be imposed on potential land-use, as a further incentive to improve land-use methods and natural resources management.

Commonly, judgements and interpretations of the law restrict the fulfilment of a property's "social function" to indices regarding land production and productivity, ignoring environmental and labour legislation parameters. In addition, there are legal gaps that allow judicial decisions on reimbursement to set amounts that are much higher than the value of lands expropriated for agrarian reform. This constitutes an abusive transfer of wealth to ex-owners and intermediaries and renders it impossible for many settlers to reimburse the actual price of the land.

The Ouvidoria Agrária Nacional (OAN - National Agrarian Auditor) has established a new system for mediating land conflict processes. It has brought important players to the bargaining table, such as the judiciary sector, the Public Ministry and the police department, with the objective of addressing conflicts related to citizenship. Many states have also started to promote agrarian auditors, as the credibility of the OAN has increased. Establishing a prevention and mediation policy in dealing with agrarian conflicts should focus on strategic planning, carried out in a participative manner, through the democratization of the formulation, management and control of public policies. The recently created Comitê Permanente de Acompanhamento e Solução de Conflitos (Permanent Follow-up and Conflict Resolution Committee) is another modern and efficient prevention tool. It provides effective answers to issues that could potentially generate conflicts and makes proposals for the improvement of agrarian reform actions and support to farming families.

Unfortunately, Brazil does not have the institutional basis to establish controlling actions regarding land structures in the agriculture sector (unlike the Sociétés d'aménagement foncier et d'établissement rural in France), even though this type of problem has been recognized every time the need for "small farm unification" has been mentioned. A great deal of legislative and organizational innovation will be required for Brazil to advance in the area of land consolidation.

Potential PRONAF beneficiaries are all agricultural families, including settlers and those assisted by "Banco da Terra" and "Cédula da Terra". Loans can be used for expenses (financing farm, livestock, commercial, industrial and service activities) and investment (financing implementation, expansion and modernization of the production and services infrastructure on the farm or in nearby rural communities). The PRONAF is made up of different credit lines, adapted to the beneficiary's profile, whose access and payment conditions have become increasingly favourable to family farmers. The Lula administration now has the task of eliminating a few obstacles that still make it difficult for a large number of families to access credit, especially those related to bank bureaucracy.

About 85 percent of the country's agriculture sector establishments are family farms. These account for almost 40 percent of the gross value of production, and more than 50 percent of most food products included in the cesta básica ("basic needs basket"). However, the family farming category encompasses distinct social groups: around 40 percent of family farms do not generate monetary income (ranging from 25 percent in the southern region to more than 50 percent in the northeast). From the standpoint of market integration, 20 percent of family farms are generally classified as "very integrated", while more than 40 percent are "little integrated" (ranging from 30 percent in the central region to more than 50 percent in the north).

Considering only commercial insertion and the gross value of production, family farms tend to be divided into three groups:

• About 1.4 million family farms are characterized by greater capitalization, structure and market participation, besides producing a considerable amount of food for the internal market.

• There are 850 000 families with almost no capital and with poor commercial insertion. Although they produce food for the internal market, they still face problems in accessing loans and financing. These problems are related mainly to a lack of technical assistance and a need for training.

• Almost 2 million farms generate little or no income as the land is basically used for subsistence production.

Results produced by agrarian reform programmes and the strengthening of family agriculture could certainly have been greater and more solid if there had been an integrated technical assistance policy involving the three spheres of government and society itself in the eight years of the Cardoso administration. When the technical assistance system (known as EMBRATER) was dismantled at the beginning of the 1990s, it also put assistance to farm families at risk, as actions in this field became very limited and no longer had the universal character of assisting family farmers.

The deficiency of infrastructure and services in rural Brazil is a direct determinant of the precarious living conditions of agricultural families, reflected mainly in the low social indicator values. This deficiency is exposed through poor road and transport conditions, and through a lack of or difficulty in product storage. The scenario is aggravated by the lack of electric energy, water supply and sewage disposal, especially in the northeastern region. Consequently, living conditions are more precarious and limit production possibilities and added value of products.

The "PRONAF Infrastructure" line brought a few differentials in relation to other types of actions:

• It was encouraged discussions between family farmers and other local agents on rural development perspectives.

• It was innovative in its degree of decentralization and in its coordination of partnerships involving municipal and state governments.

• It made progress in defining clear and objective criteria for infrastructural support to municipalities.

This PRONAF line contributed to the development of municipalities with a considerable presence of family farms. Nevertheless, budget limitations did not allow the "PRONAF Infrastructure" to serve every eligible municipality. Housing, electric energy, rural roads, water supply and the sewage system as a whole are still major needs.

Results and impacts

There is great controversy surrounding the actual results of the policy of settlements and about the two types of "PRONAF" credit lines aimed at settlements (individual credit and infrastructure investment). At the end of the Cardoso administration, there was a campaign to disqualify the settlements. The government was accused of counting "ghost" settlements and of abandoning families after placing them on land, which resulted in great evasion. However, to demonstrate that a few failures could not be used to condemn a whole programme, at the end of 2002 the MDA invited researchers at the University of São Paulo agronomy school (ESALQ/USP) to try to establish an accurate picture of the settlements.^[10] Their results confirm a few old hypotheses.

First, be it from the edaphic-climatic or economic viewpoint, settlements are normally in marginal areas mainly in terms of connections with other markets (urban agglomerations and ports). This is a result of the agrarian reform institutional framework and the historical period. Rarely are favourable areas not exploited or underexploited, which obviously protects them from expropriation. In other words, settlements only come into place in prime areas when:

• conflicts between heirs leave the land idle, thus leaving the property open to expropriation;

• there is a change in the destination of public property;

• when the government decides to buy certain real estate.

Second, a great number of settled families consist of social groups victimized by wretchedness and exclusion. These are families who previously had almost no access to housing, health, education and credit. They tried to survive in any corner of the countryside as labourers, part-time workers and harvest workers. Only a small portion is made up of the descendants of family farmers who never owned land (sharecroppers, small tenant farmers and squatters) or had insufficient land to guarantee that family members who wished to live as farmers remained in farming. The combination of marginal land, unskilled labour and extremely limited access to investment is clearly not conducive to activities and occupations capable of generating reasonable income. All the evidence available on this subject converges to an apparent paradox: the lower the monetary income received by settlers, the greater the number of those who declare themselves satisfied. This is because their previous situation was much worse. In reality, regional contrasts are very strong. Income is lower and satisfaction is higher in the northeastern region, whereas the opposite seems to be the case in the south and southeast. However, in general, access to land caused a few people to jump from a situation of extreme destitution to a situation of poverty. Others were able to eliminate the poverty status, but could not reach a satisfactory level compared with permanent farm employees or even with certain types of agricultural day labourers. However, there are two basic differences that favour settlers, even where their monetary income is very low. The first is the dignity of living on their own land, and gathering the family around a table of their own. The second is having stability that guarantees 'basic needs'.

Sparovek (2003) shows that, in general, both the environmental quality of settlements and the quality of life of settlers are precarious. The four main factors that characterize the poor quality of life are:

• difficulty in accessing health assistance in emergencies;

• difficulty in accessing good-quality water;

• difficulty in accessing high schools;

• lack of domestic sewage treatment.

The four main factors that account for poor environmental quality are:

• lack of conservation areas defined by law;

• disrespect regarding the maintenance of legal areas of native vegetation;

• illegal extraction of natural resources;

• erosion.

However, Sparovek emphasizes: "components of social assistance in agrarian reform actions (credit for installation and for housing, as well as basic infrastructure), are not the most important points, nor the ones that mostly attract rural workers." (Sparovek, 2003, p. 170). If they were, continues the author, indicators of abandonment and illegal selling of land plots would not be so insignificant. This emerged as the major surprise of the research. Contrary to what one of Brazil's major newspapers claimed in its campaign against the agrarian programmes of the Cardoso administration at the end of 2002, Sparovek says that the effectiveness of land distribution was significant, and the main factor highlighted is the small number of vacant or unified plots.

LESSONS AND PERSPECTIVES FOR THE FUTURE

The Cardoso administration's settlement programme was globally successful because it raised a considerable number of families above the poverty line through its promotion of access to land. It showed that it is possible to settle about 100 000 families per year, even with a series of legal and financial limitations related to expropriations. That means that at least 100 000 families per year began to have access to housing and nourishment. However, a sine qua non condition of this performance was a strong drop in the price of land in the years that followed monetary stabilization, coupled with several mechanisms for obtaining these land assets. It was possible to reimburse large landowners according to market prices and to buy land easily that could not be expropriated.

However, as the process of settling families rose in scale and rhythm, it was not possible to maintain the quality of the programme, which had not been very high at the outset. This resulted mainly from a serious institutional problem: the centralization of actions within the arena of the federal government, mainly within one agency, the INCRA. Where there is little involvement of the state and municipal governments, settlements are viewed as "territorial enclaves" of the federal government in a region. In order to improve the quality of settlements it will be necessary to transfer many of the tasks of the INCRA to the state land institutes. It is with them that farm workers' unions (the CONTAG and its state federations), landless organizations (such as the MST), NGOs, municipal governments and other local entities will be able to consolidate present and future settlements. Only this type of collective action will improve settler performance.

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FAO/18202/G. Bizzarri