DEVELOPMENT-BRAZIL: Reforming Agrarian Reform

By Mario Osava Reprint | | Print |

Mario Osava

RIO DE JANEIRO, Mar 31 1999 (IPS) - Government plans to reduce subsidies to families that have received land from the state as part of its agrarian reform, is causing great debate in Brazil.

The minister of Agrarian Policies, Raul Jungmann, has promised that the government would continue settling between 80,00 and 85,000 families a year, but by means of less generous credits and a more rapid “emancipation” of benefits.

The state did not have sufficient resources to turn over that number of families under the previous model, Jungmann says rejecting the argument of social movements and non-governmental organisations that he was imposing the rules of the market on a programme that was meant to be of a social character.

Besides cutting back on subsidies, necessary because the government must drastically reduce its spending in order to avoid financial collapse, changes in agrarian reform respond also to the conclusions of intensive investigations and developmental analysis undertaken since last year.

More than 100 professors from 20 universities participated in 18 studies about distinct aspects of this problem, Jungmann said recently.

The changes are also an “effect of success,” elaborated Ademar Romeiro, a researcher at the University of Campinas, who participated in a series of reports spearheaded by the Ministry of Agrarian Policy in conjunction with the United Nations Food and Agriculture Organisation (FAO).

The accelerating distribution of land “revealed the faults in the process,” previously obscured by its small scale, explained the economist.

In the last four years, some 287,000 families received land from the state, compared to an average of barely 7,000 per year in the preceding period, according to statistics from the government.

One problem is the paternalistic relationship of the National Institute of Colonisation and Agrarian Reform (INCRA), the executive organ of the project, whose subsidies keep the beneficiaries dependent indefinitely, Romeiro emphasised.

The credit subsidies are “a unique case in the world,” since half of the loans are repaid, yet still insolvency is between 17 and 25 percent, added Carlos Guanziroli, a consultant with FAO who coordinated seven studies evaluating the settlements that were carried out.

The discount leads to numerous peasants considering those credits to be a donation and “they do not take full advantage of the gift,” explained Guanziroli.

The solution, according to analysts, is not to go to the other extreme and eliminate those loans, but rather to formalise the subsidies and impose realistic interest rates, although less than those of the market.

The other problem identified is the high cost of land in Brazil, twice that of Argentina, in spite of the fall registered in the last five years due to the unstable currency and new laws that threaten large properties, indicated Romeiro.

Its value usually rises higher still in seizures. The owners always appeal to the justice system and, halfway into the process, obtain court orders that increase the compensation up to ninefold, complained the minister.

For that reason, land distrubtion will be increased through market mechanisms, like caps and long-term financing, so that peasants can directly acquire parcels.

However, “expropriation will continue to be the principal instrument,” said Jungmann.

The Rural Land Tax, whose increase contributed to the amount of unproductive land by up to 20 percent per year, frustrated hopes that land would become cheaper and a wide redistribution of land in the country would be promoted.

That rate “opened the doors” to tax evasion. The big landowners widened the areas declared exempt, through being unproductive or constituting a forest reserve, explained Romeiro.

Closing those doors depends on political conditions and the landowners remain a powerful pressure group, agreed Regina Landim Bruno, a sociologist and professor at the Federal Rural University of Rio de Janeiro, who also participated in the studies coordinated by FAO.

The subsidies do not prevent a large number of families from abandoning the settlements – an average of 30 percent quit because of the poor quality of the land. In addition, the lack of highways and electric, educational and medical services, as well as the delay in credit and the lack of solidarity among the settlers are important factors in tax evasion, Bruno added.

In any case, the financial aid is fundamental. The evasion is strongest at the beginning, when families without resources arrive on the lands they have been assigned.

“The settlement recently stabilised with the start of the credit flow,” noted the researcher. (FIN/IPS/mo/dg/if-pr- dv/ks/99)