A New Perspective on Brazilian Agrarian Reform (Speech Transcript)

Author: Rafael Figueiredo Mendes

Advisor: Sarah Petrovic & Robert Fulton

1st Place Award Developing Research at Emmanuel College 9th Academic Showcase (2018)

Abstract: The goal of this research is to provide a summary of Brazil’s background, regarding their rural land organization and society wealth discrepancies, this paper tries to bring a cursory understanding of the problematic currently faced by the country. While analyzing the root of the problems, we were able to understand it is more than just a centuries-long economic result, the need of agrarian reform is en-rooted in the country’s culture, and organization since the beginning of Brazil’s colonization, but was never properly developed. There is clearly a clash of ideas and principles between the people’s representative and the social movements that take a stand for the current agrarian reform model; this research focuses on solving that. My conclusion is that currently it is necessary to start developing a project, even if a short-term one, to at least start moving the inert system to a possible greater solution, based on diplomacy, and a better connection between public interest and the people’s representative on different social spheres. This research/speech received the recognition as the best research project at the 2019 Emmanuel College Academic Showcase, being the first business research to receive such award in the University history.

A New Perspective on Brazilian Agrarian Reform (Speech Transcript Format)

Brazil has some major problems when speaking about agrarian reform, inequality is huge, the current public system does not work properly, and the existent social movements, MST, is less successful than it could be, because they are ideologically disconnected to the Brazilian society, and the economic reality. This research advances a simple, initial proposal to address agrarian inequality, but more important, it suggests bringing a change of perspective regarding the necessary actions for a successful agrarian reform. The optimal solution I am presenting is to focus on entrepreneurship development programs, instead of simply relying on an inertial, and palliative-focused governmental politics

Brazil has been one of the most world’s unequal countries from the beginning of its colonization by the Portuguese. The World Bank’s Gini Index, which measures the extent to which the distribution of income (or, in some cases, consumption expenditure) among individuals or households within an economy, illustrates the tremendous deviation from a perfectly equal distribution in Brazil. The Index ranges from 0-100 and in 2015 Brazil`s Gini Index was 51.30, so Brazil is currently above the halfway mark, which is terrible, and is positioned as one of the top 10 most economically unequal’s countries, and this inequality extends to the both urban and rural environments. According to the Agropecuary Brazilian Confederation in 2017 the agribusiness contributed to 21.58% of the country GDP while its production model, according to IBGE data from 2014, is mostly belts of mono-culture focused on exportation

The Brazilian historical development led the country to have its agricultural economy is highly dominated by the plantation model. According to Argemiro Brum the first centuries from the finding of Brazil, the economic efforts were focused on attending the external market necessities, with the power mainly with the landowner’s elite and the slave’s merchants, that guaranteed that Brazilian politics worked in determination of its economic activities, Lucia Gaspar explains that it historically benefited those elites to the detriment of other social classes, specially the slaves, and even thou slavery lasted until 1888 and determined the path and the historical-economical results from Brazil and their agrarian production, the slave-based model had as consequence not only the slave degradation, but also to a certain extent to the landowners, creating in its society values associated not with work, but with the ability to use someone’s work in a more advantageous way to oneself. Those values are shown on the fields, on an updated manner nowadays, where landowners use practices that ignore rights and minimal conditions of the rural workers, while sustaining political-economical influence through the usage of diverse clientelism. Martins explain that the slave-based system created socio-economic characteristics in our society that persists until today, since the country adopted an identity of raw material production. While Sanz-Pastor explain that Brazil did not open their frontier to free exploration, like the United States; the enslave ideal, with was imposed by many times during history was the cornerstone of this system and the identity acquired by the country. 

Brazil suffers tremendously for unequal distribution of land between large agricultural organizations and poor peasants, according to Duarte the concept of large property does not begin, therefore, to be defined by the extent of the area occupied by the owner. The concept initially has a negative meaning - there is great property where the distribution of land is not in direct proportion to the peasant population. Following this idea on a report produced by Oxfam Brasil, we can see alarming data regarding Brazilian agricultural organization; large properties account for only 0.91% of the total of Brazilian rural establishments but concentrate 45% of the entire rural area of the country. On the other hand, establishments with an area of less than ten hectares represent more than 47% of country’s total establishments but occupy less than 2,3% of the total area. These small producers produce more than 70% of the food that comes to the table of the Brazilian, since large mono-cultures export most of their production. Barraclough, explains, In Latin America, it’s evident that Brazil have the most land available for cultivation, while also being the one with the least advances in agrarian reform. According to Oxfam and the General Attorney of the National Treasury, in 2015, 729 legal, or natural person, owners of 6.5 million of hectares of land, had federal debts of more than R$200 billion, with this land it would be possible to settle 214,827 families , almost two times the number of landless workers families demanding agrarian reform. It’s worth the reminder that according to article 184 of the Brazilian Constitution of 1988, the land must fulfill its social function, or it will be subject to expropriation to serve the purpose of agrarian reform. Jose Silva argues that the agrarian reform have not evolved for political reasons, implying that even the national leaders, left them for the sake of maintaining their basis of political alliance, such as ex-President Fernando Henrique Cardoso who, at his core, seemed to be aware of the need for such reforms in rural areas. Camilo Carneiro, analyzing data from FPA, the Brazilian Parliamentary Front of Agriculture, noticed that in 2017 the agribusiness lobby controlled 41% of the Federal lower house and 29% of the Senate.

The politics of land reform has become polarized by the FPA, who sustain, and spread, an erroneous argument that agrarian reform is a socialist activity, and they do it because the notion of agrarian reform has been thought from the reality of rural settlements as explained by Bergamasco & Loder. The MST (Landless Workers Movement), the ones responsible for most of the settlement establishments define themselves as “a mass social movement, formed by rural workers and by all those who want to fight for land reform and against injustice and social inequality in rural areas” and they are a Marxist movement according to Feix. Their invasions of unproductive land, with the purpose of establishing rural settlements in those “unproductive latifundia” spread the clashes that have arisen in the country. However, agrarian reformation which according to Brue analyzing the works of Adam Smith related to society welfare, it is not a socialist program.

Currently the BNDES, National Bank of Development, have a program called PRONAF, National Program of Family Agriculture Fortification, that offers easier access to financing, with interest rates way smaller than domestic prices, if they fit in the family agriculture framework, like that properties size can’t be bigger than 4 fiscal modules, and the hectare values for those modules are variable within each city. However, the federal financing doesn’t solve the lack of land access and neither gives a proper land function those unproductive, and untouched lands. We need to try to simultaneously take this problem out of the public sphere, while offering an advantage to those in power of those massive unproductive lands. They want to keep their lands for speculating purposes, so why not also show them, they can profit on the waiting time and inside the legal sphere.

 There is a tool called Land Leasing, which can be found in the Land Statute, that might be the solution for it. This way the owner can hold on to his land, making it a land that fulfills its social function thereby being safeguarded from the article 184 of the Brazilian Constitution of 1988. Alongside with that, he might receive risk-free earnings, and even redact the contract in a way the full land extension might be sold when the time/profit is suitable. Going even further, I developed a rudimentary business model for those lessees, to check it's viability on a smaller scale, by planting organic horticulture.

Without previous knowledge I planted 100 Organic American lettuce seedlings in my backyard, I bought 12lbs of worm humus to prepare the land, bought a transparent tarp big enough to cover the small area, and for 12 weeks I watered them three times a day, using approximately 945 gallons. With the total costs of R$76 I managed to successfully grow 86 lettuces. Focusing on selling them on a below market price average I received a total revenue of R$305 and a total profit of R$229. If I had purchased the organic product certification, my revenue would have easily doubled.

As you can see on the image, it was a rudimentary, simple work, yet effective enough for a personal production. With the proper area, technology, agrarian consulting, and financing, the project could easily escalate to be highly profitable. According to a 2018 report from EMBRAPA, an agency part of the Brazilian Ministry of Agriculture, family agriculture can obtain a gross value of agricultural production of R$1,613,94 per hectare, higher than the R$792,78 per hectare of the non-family agriculture one. According to INCRA, the smallest fiscal module in the country is 5 hectares and the biggest one 110, which means a familiar agriculture property can be anywhere in the country as big as 20 hectares achieving a gross value of production of R$32,278, just for the sake of comparison on the minimum monthly wage in Brazil is R$998.

Adam Smith famously stated “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages”. Unfortunately, we have a calcified, and endemically corrupt public system, we can’t continue to fully rely on their inertia, instead of those social movements brutally invading properties that could be considered unproductive, resulting in injuries, deaths, and lifelong lawsuits, a more diplomatic solution would give them then the opportunity to at first lease their lands, and then move to the final expropriation in case of leasing failure. Another possibility could be going through a fully private funded solution, by starting a family agriculture focused fund through the financial market. I’m not by any mean giving a final solution to the problem, it is short term focused, that might kick-start a private movement or hopefully it will give our representative and their teams a different perspective on how to deal with this 400-year problem, with a cheap, easily implemented and highly effective solution that positively affects the society without an significant social disruption, while simultaneously fulfilling the constitutional rights and obligations  

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