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BRAZIL: Wall Street Concerned over Mass Landless Movement

In Brazil, the Poor Stake A Claim on Huge Farms -- Thousands of Squatters Seek Faster Government Action

by Matt MoffettThe Wall Street Journal
July 10th, 2003

Outside of this central cattle town, activists have built a massive squatter camp, with 3,500 families who say they won't leave until the government gives them property. In other places, protesters demanding land have looted food trucks, seized toll roads, and taken over government agricultural offices. Last week, the nation's president convened an emergency meeting with the group's leaders, who refused to halt their protests.

The Landless Workers Movement, the largest social movement in Latin America, is agitating for sweeping change in a country with one of the world's most inequitable land distributions. "Nobody wants to break the law," says Antonio Carlos Santos, 38 years old, who moved to the camp with his wife and three children last month, after losing his job at a slaughterhouse. "But we'll do what we must to survive."

The rural unrest is shaping up as a critical test for the six-month-old government of President Luiz Inacio Lula da Silva, Brazil's first elected leftist leader. Peasant protests and land occupations are also threatening to disrupt thriving agribusinesses that have turned Brazil into the world's largest exporter of raw sugar, second-largest exporter of soybeans and third-largest exporter of beef. The clash underscores Mr. da Silva's dilemma: Is it possible to impose both economic efficiency and social equity in Latin America's most-populous nation?

"The government plays on our team," said Joao Pedro Stedile, the movement's leader, shortly before meeting with the president. Mr. da Silva added fuel to the fire by briefly donning a red cap bearing the landless movement's logo -- a man and woman standing side-by-side, the man hoisting a machete. That prompted an agribusiness leader to condemn him as "servile" to landless interests.

Government officials said it's Mr. da Silva's custom to banter with a wide array of groups and that the meeting helped cool tensions.

The U.S. has an important stake in Brazil's continued economic stability. U.S. financial institutions hold a sizable chunk of Brazil's $260 billion public debt, and the nation's 170 million consumers represent a key market for corporations such as General Motors Corp., Whirlpool Corp. and Citigroup Inc.

The Landless Movement was founded in 1984 with the goal of winning land for impoverished Brazilians. In a country blessed with an abundance of resources -- and cursed with poverty -- the movement has successfully pressed the argument that the government owes people a plot of their own. "Land is as basic of a need as air or water," says Edi Ronan, an organizer of the Epitacio encampment.

Polls have shown most Brazilians to be overwhelmingly sympathetic with the aims of the landless, especially after massacres of peasants by police and landowners in the mid-1990s. But some have flinched at the movement's increasingly bold tactics, such as the brief takeover last year of a ranch owned by the family of the then-president. Throughout Brazil, which is larger than the continental U.S., landless groups have launched 128 "land occupations" this year -- in which members march onto property owned by someone else and stay for anywhere from hours to weeks.

About half of Brazil's arable territory is held by just 3% of all landowners, according to government statistics.

In recent years, the Brazilian government has expropriated millions of acres it deems unproductive, paid compensation to owners and turned it over to thousands of landless families. Yet the plots are often so small that they can't be nearly as productive as the nation's large farms.

Meanwhile, landowners are digging in. "Anyone stepping on private property is inviting big trouble," says Luiz Antonio Nabhan Garcia, leader of the Democratic Ruralist Union, a group of farmers and ranchers. Indeed, Brazilian TV stations last week went on a local ranch and filmed gunmen, their faces covered in ski masks, preparing to defend their land.

Agriculture -- so critical to the nation's economy that it is known as "the green anchor" -- accounts for about 10% of Brazil's $500 billion gross domestic product. When related industries are included, the rural sector represents nearly 30%. Operating without the huge subsidies enjoyed by major European or U.S. farmers, Brazil's growers have used the vast scale of their farms and the latest technology to help attain an agricultural trade surplus projected at $23 billion this year.

"When people talk about the need for land reform, I ask, 'Why reform the one sector of the economy that is working?' " says Guilherme Coimbra Prata, a cattle rancher and farmer who lives near a squatter camp. Simmering conflicts in the area around Presidente Epitacio have already hurt the local economy, ranchers say. This was once the center of the country's meat-packing industry. But over the past several years, a dozen or so packing houses have left for areas where the landless movement has less of a presence.

Brazil's lopsided land distribution, with some owners in the Amazon claiming tracts the size of European countries, is a legacy of its colonization by a Portuguese monarchy. Later laws enshrined the inequities. While the U.S. Homestead Act of the mid-1800s granted frontier land to anyone who would settle it, Brazil's law from about the same period made settlers buy their land, notes a study by Tulane University scholar Anthony W. Pereira. Brazilian landholdings were never broken up by a revolution, like the one that rocked Mexico early last century.

The land-ownership issue faced its first strong challenge with the emergence of the Landless Movement, whose ideology mixes Socialism and Roman Catholic liberation theology, with a dash of Brazilian mysticism.

Pressured by the movement, Brazil's last president, Fernando Henrique Cardoso, undertook one of the most ambitious land-distribution programs ever seen in the developing world. From 1995 to 2002, he handed out 44.5 million acres, an area about the size of Missouri, to more than 600,000 families.

But Mr. da Silva's government has stumbled badly on the land issue. So far this year the federal land office has settled only 5% of the 60,000 families for which it aimed to find land in 2003. Government agrarian officials say Mr. da Silva wants to emphasize the quality of the agrarian settlements -- with good farmland, strong infrastructure and technical support -- rather than just the quantity. Agrarian officials also say they are laboring under tough budget cuts.

The Landless Movement now claims 1.5 million members, and it has grown increasingly sophisticated. It boasts a school system with 3,900 educators working in squatter camps and settlements. They teach not only math and writing, but also politics and "values of the new man and the new woman." Through its Web site and a retail outlet in Sao Paulo, the movement sells products ranging from wine and cheese and organic seeds to T-shirts and desk calendars. A Friend of the Landless affiliate in San Francisco accepts donations and helps organize tours for U.S. students.

Some say the landless have been more efficient at acquiring land -- and government aid -- than cultivating their new properties. A recent University of Sao Paulo study on properties ceded to the landless found less than 10% had organized into cooperatives or partnerships. About 60% of the settlements were organized to seek credit or services from the government.

In 2001, the 60,000-acre Itamarati farm was turned over to landless and other leftist groups, and held up as a showcase of Brazil's democratic agricultural model. Its previous owner had been Olacyr de Moraes, once Brazil's richest man and a legendarily efficient soy grower. Itamarati's new managers aren't enjoying similar success: production has fallen by one-third and many of the 1,100 families barely have enough to eat, despite government assistance.

While the landless were gaining property, if not prosperity, Brazil's agribusiness was taking a leap into the major leagues. It benefited from big investments in technology, as well as its competitors' misfortunes, including bad weather and disease. For instance, Brazilian beef exports doubled over the past three years. Brazilian beef is now used in most TV dinners consumed in the U.S.

Francisco Jacintho, who raises several thousand cattle on the Santa Irene Ranch, says he maintains an uneasy peace with landless activists who obtained titles abutting his property. Several years ago, the landless tried seizing Santa Irene. Mr. Jacintho and a dozen farm hands greeted 50 activists and a convoy of nine tractors with a hail of pistol fire. No one was seriously injured. "The landless movement is a cancer," says Mr. Jacintho.

While Brazil has lots of land, much of it is in the inhospitable Amazon or arid Northeast. Some of the most intense conflicts have played out in rural areas such as Presidente Epitacio, which has roads and utilities and attracts unemployed laborers from nearby cities.

The Epitacio camp's leader is Jose Rainha, a charismatic organizer who has been at the center of several violent conflicts. (In 2000, a state court acquitted him of charges of having incited the murder of a landowner.) He has referred to the Epitacio shantytown as "New Canudos," an allusion to the site of a bloody, century-old peasant revolt instigated by a bearded mystic.

Outside many huts flies the Landless Movement's flag, with the machete-wielding man on a bright red background. Inside every shack is a different story of frustration. Mr. Santos, the man who lost his slaughterhouse job, tried to get a parcel through official channels at the government land office. "I filled out the forms, went for the interview and never heard from anyone again," he says.

Ronaldo Moraes, 25, a second-generation landless activist, knows the stakes are high. In one land occupation he participated in, eight landless were wounded by gunfire from ranch security guards. While his wife, Lucia, nurses his 10-month-old daughter, Mr. Moraes cooks beans over an open fire. A couple of yards away, a hole in the ground serves as a toilet. Mr. Moraes says he hasn't been sleeping well, anticipating the action ahead. "The troops are always tense before the battle," he says.

Once the shantytown reaches 5,000 families, Mr. Rainha has said he'll lead a march into the nearby city of Presidente Prudente, where some ranchers have homes. The mayor of Presidente Prudente says he'll block the entrance into the city.

The tension is agonizing for ranchers such Caio Morelli, 38, who raises 5,500 head of cattle a few miles from the camp. The landless recently swarmed a neighboring ranch and killed a bull owned by Mr. Morelli that was grazing there. Afterward, he obtained a court order against trespassers. "There are other ranchers getting guns," he says.

Mr. Morelli, who has a degree in animal sciences, has invested heavily in genetic technology to speed his herd's maturation. Now, as he mulls investment to fertilize and fence pasture land, he finds himself in a
dilemma: Ranchers who don't invest risk having their land deemed unproductive and expropriated by the government. But upgrades make the land more attractive for squatters, he says.

He thinks the solution may only come in the long term. He persuaded the municipality to open a school on his property for children of ranch hands and local farmers -- and, against some opposition, children of the landless too. "Maybe the next generation will learn to get along better," he says.

Write to Matt Moffett at matthew.moffett@wsj.com





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