From January 2003 to July 2004, Brazil received $3.2 billion in loans from the World Bank and from the Inter-American Development Bank.  During this same period, Brazilian public institutions paid $6.9 billion to these banks.  In other words, Brazil sent abroad $3.7 billion more than it received.

The Counter-Agrarian Reform of the World Bank

* Marcelo Resende and Maria Luisa Mendonça

 In recent decades, an idea was created in different parts of the world that the rural territory was not significant for development.  The processes of rural exodus were based in the image of urban centres as the principal generators of income and economic opportunities. 

 However, the regions with major concentrations of natural resources – such as water, land, minerals, and biodiversity – are in rural areas, and have come to be the centre of the policies of the multilateral financial agencies, especially the World Bank.  It is not by chance that, today, the main projects of the Bank are directed toward the countryside. 

 This is the case of a recent loan by the World Bank of $505 million already released and of $695 million to be released for Brazil.  The World Bank generally supports projects that benefit large businesses, such as the construction of a grain port in Santarém (Pará) for the draining of soybeans exported by Cargill.  The project also includes the paving of roads linking the state of Mato Grosso with Cargill’s port in Pará.  This policy stimulates environmental destruction in the Amazon, where extensive areas of forest are being substituted by areas of monoculture of soybeans and rice, by large-scale cattle raising, and by clandestine timber companies. 

 Under the pretext of ‘economic assistance’, the World Bank influences the economic policies of the periphery countries.  To the extent to which the Bank demands matched funding from governments, the State budgets become committed to the financing of its projects. 

 From January 2003 to July 2004, Brazil received $3.2 billion in loans from the World Bank and from the Inter-American Development Bank.  During this same period, Brazilian public institutions paid $6.9 billion to these banks.  In other words, Brazil sent abroad $3.7 billion more than it received (Folha de São Paulo 08/04/2004).

 In Brazil, the ideology of the Bank has had its greatest impact on the government of Fernando Henrique Cardoso (FHC), who established an agrarian policy called “New Rural World”, basically centred on three principles: (1) the settlement of landless families as a compensatory social policy; (2) the ‘descentralization’ of the settlement projects; (3) the substitution of the constitutional instrument of expropriation by the propaganda of “land markets’.

 During the FHC government, the World Bank initiated three lines of financing: Land Note (Cédula da Terra), Land Bank (Banco da Terra), and Land Credit to Combat Poverty (Credito Fundiário de Combate à Pobreza).  This policy consists, basically, in the financing of land purchases by workers, which becomes a debt to be paid in twenty years.  At the same time, the large landowners are “rewarded” with the lump-sum payment for their property. These programs contradict the instrument of expropriation, mandated by the Brazilian Constitution, which compensates landowners with Titles of Agrarian Debt (TDAs – Títulos da Divida Agrária) over a period of twenty years.

 In the FHC government, these three lines of financing (Land Note, Land Bank, and Land Credit to Combat Poverty) spent about R$ 1.5 billion, and reached 74,585 families, as shown in the Table below:

Sources: Ministry of Agrarian Development (MDA)/National Institute of Colonization and Agrarian Reform (INCRA)

NB: These data are partial, since the MDA has not yet divulged the complete data.

 According to research undertaken by academics and grassroots organizations, these programs present the following problems:

·          Increase in the cost of land and the lump-sum payment as a reward to the landowners.

·          Economic inviability, impossibility of payment of loans, and indebtedness of rural workers.  The areas acquired, many of poor quality, do not provide the conditions necessary for the generation of sufficient wealth to pay down the debts.

·          Acquisition of unregistered and unproductive lands, which are thus suitable for agrarian reform programs.

·          Lands are purchased by associations of workers, without autonomy in the choice of the land.  These associations are many times organized by the landowners themselves and by local politicians.

·          Precarious conditions of survival and abandonment of the areas.  Instead of alleviating poverty, the financial situation of the participants of the program worsened. 

·          Complaints of corruption involving municipal administrations, politicians and unions, who were favoured in land purchase and sale transactions

 With the beginning of the Lula government, the grassroots movements in the countryside hoped that the World Bank projects will not continue. The expectation was that agrarian reform would be at the center of the political agenda, as a way to generate employment, to guarantee food sovereignty and as the foundation of a new development model.

 Initially, the Ministry of Agrarian Development (MDA) announced the suspension of the Land Bank program, and the evaluation of the Land Credit program.  As of yet, this evaluation has not been released, and the program was only temporarily suspended. 

 At the moment, what we observe is the continuity and extension of the World Bank policies for rural areas.  In November 2003, the MDA announced the “National Plan for Agrarian Reform: Pace, Production and Quality of Life in the Countryside”.  One of the main goals of the plan, with a forecast of reaching 130,000 families, is the continuation of the Land Credit program, which follows the logic of “land markets”.

 In the Lula government, the MDA maintained the administration of the program within the National Secretariat for Agrarian Reordering and came to call it the “National Program of Land Credit”, with three lines of credit: Combating Rural Poverty, Our First Land, and Consolidation of Family Agriculture.

How was the FHC Government’s Program and How is Lula’s Program?

Comparative Table:

 As we can observe, the Land Note, the Land Bank, and the Land Credit of FHC’s administration are contained in the current National Program of Land Credit of the MDA.  Only the names of the projects changed, which are now called Combating Poverty, Our First Land, and Consolidation of Family Agriculture. 

 In other words, they are the same programs with only minor changes, but the central idea of the ´land market´ remains the same.  According to this notion, the State gives up its obligation to promote the reduction of land concentration through redistribution of land. 

 The central problem of this policy is privatization of land, and the replacement of Constitutional agrarian reform – based on the expropriation of large landholdings that do not fulfill their social function – with the propaganda of ‘land markets’.

 Up till now, the government has not released an official evaluation of the World Bank programs, and many questions remain unanswered.  For example:

·          What is the rate of default?

·          How many people are unable to pay their debts and abandon their land?

·          What is the economic return of each project?

·          Is the income obtained sufficient to pay back the loans, to pay for the land, and for investments in production?

·          Has an audit of these projects been carried out?  What is the result?

·          Have the complaints of corruption presented by social organizations been investigated?  How is the government going to respond?

·          What is the situation of current defaults in relation to contractual penalties?

 Another goal of the government’s plan, which aims to facilitate the implementation of the ‘land markets’, is the registration and geo-referencing the rural territory, with the regularization of 2.2 million rural properties and the titling of 500 000 leaseholders. This program eliminates the notion of public and community lands, and could contribute to an increase in concentration of land ownership.

 Through the sale of holdings, the titling process could benefit large landholders and fraudulent claimholders, aside from strengthening state governments in the concession of public lands and kickbacks for loggers and large agribusinesses. In the Amazon region and in the Savannas geo-referencing could facilitate the privatization of land and the expansion of monoculture on a massive scale.  The project also permits the World Bank to have access to strategic data about land ownership in Brazil.

 The Brazilian territory contains an immense cultural and social diversity, that includes community of acampados [people camped out in expectation of land redistribution] and agrarian reform settlers, rural waged-workers, family producers (sharecroppers, leaseholders and renters), owners of tiny rural properties, traditional populations (riverbank-dwellers, artesan fishers, quilombolas [descendents of communities of escaped or freed slaves]), indigenous peoples, people displaced by dams, and extractive communities (gathering coconuts, rubbers), among others.

 The program of geo-referencing should focus on the demands of grassroots movements in the countryside, with the regularization of quilombo, extractive and river communities, the acquisition of areas for the resettlement of those displaced by dams, and the demarcation of indigenous lands. It should also provide leaseholders the right to use the land, with all of the social and economic conditions assured, instead of the issuing of land titles, which allow the sale and reconcentration of land.  In this way, leased land can be preserved as public areas, for communal use.

 Still in relation to the proposal of geo-referencing the rural territory, it would be easier and less onerous for the State to establish a term in which all large landholders present their productivity report, property registration, and the surveyed area.  In this way, the burden of proof would be reversed, and would become the responsibility of the landowners. The application of such measure would affect only 70 thousand properties larger than 1000 hectares, out of a total of more than 4 million properties.  These 70 thousand properties make up 43.6 % of the total area registered with INCRA.

 In spite of the fact that the National Plan for Agrarian Reform gives priority to the policies of the World Bank, most grassroots organizations hope that the Lula administration will meet its commitment to bring about a broad agrarian reform along constitutional lines. In order to do this, it’s necessary to end the provisional measure that impedes the expropriation of occupied land, and to establish a limit on the size of rural properties in Brazil. 

 In this context, it is incomprehensible that the responsibility for the formulation of policies for the countryside, including the use and occupation of land, would be delegated to an international financial institution such as the World Bank.  It is essential to maintain public policies compatible with the historic demands, the experiences, and the proposals of grassroots movements who fight for land democratization and for food sovereignty.

* Marcelo Resende is a geographer, former president of INCRA (National Institute of Colonization and Land Reform) and a member of the Social Network for Justice and Human Rights.

** Maria Luisa Mendonça is a journalist and director of the Social Network for Justice and Human Rights (Rede Social de Justiça e Direitos Humanos).