World Bank Schemes Hurt Landless in Brazil
|April 7, 2002||Posted by Staff under Archive, Progress Report, The Progress Report|
World Bank Should Do Better Or Else Be Closed
Land Rights a Fraud in Brazil
Landless Brazilians Challenge World Bank
by Abid Aslam The World Bank is being drawn into Brazil’s decades-old struggle for land reform as peasant groups accuse the lender of colluding with the wealthy in ”social and political fraud.”
At issue is Bank ‘support’ for efforts to ‘sell’ land to the poor in Brazil. The Bank’s program will actually make it impossible for intended beneficiaries to repay the debts they must enter into under the ‘Land Reform and Poverty Alleviation Pilot Project’, the groups charge.
The project, while driving up the price of agricultural land available to rural workers, is being implemented as an alternative instead of a complement to Brazil’s constitutionally-mandated agrarian reform programme, say the groups.
This, they declare in a formal complaint, amounts to ”social and political fraud conducted by the State Governments (of Brazil)…encouraged by the Federal Government and supported by the World Bank, in the guise of land reform.”
The complaint alleges that the Bank has failed to consult people affected by the project, has withheld key operational details from their representatives and has pushed through its plans despite local resistance — in violation of the agency’s policies on poverty reduction, information disclosure, and involvement of non-governmental organisations.
Among the accusers is ‘Sem Terra’ (”without land”), also known as the Landless Rural Workers’ Movement, which since the late 1970s has earned a reputation for galvanising the dispossessed to use plots left idle by wealthy land owners.
Those grassroots tactics, coupled with increasing media savvy, have won national headlines for the cause but headstones for its representatives, a number of whom have been killed even as their movement has grown.
The movement in recent years has garnered the solidarity of labour unions in Brazil’s cities and the sympathy of the country’s television producers but it has run up against often violent opposition from land owners.
The legal action warns the Bank that, by siding with the wealthy, the agency is contributing to ”a new political coup against land reform in Brazil exactly at this historical moment of great legitimacy (given) by society to the workers’ struggles to overcome severe inequality…in the Brazilian rural areas.”
Sem Terra, 11 other organisations and 853 individuals want the Bank’s Inspection Panel to investigate their allegations. Their request comes at a time when the agency’s executive board is weighing proposals from Bank management and borrowing countries – Brazil being among the most prominent – to shorten the quasi-independent watchdog’s leash.
Landless workers have been harmed by the project and are likely to be hit again by follow-up loans that the Bank intends to make to support similar projects throughout the country, the groups say.
The 150-million-dollar pilot project, known locally as ‘Cedula da Terra’, began in 1997 and is being carried out in the states of Ceara, Minas Gerais, Bahia, Pernambuco and Maranhao. Its aim is to enable some 15,000 families to take out loans to buy plots of agricultural land.
In exchange, participants in the scheme must agree to steep interest rates on the land loans and must forgo all existing Brazilian programmes in favour of yet another credit scheme. In many cases, they are not told of these conditions until it is too late, the groups charge.
The additional credit, with interest higher than inflation and in excess of projected farm earnings, is being pushed even further from the reach of poor rural workers by tight monetary policy mandated by the International Monetary Fund and enforced by the World Bank.
”Due to the high cost of money, (the loans) are inappropriate even for farmers already established,” say the groups, assembled under the banner of the ‘National Forum for Land Reform and Justice in the Fields’.
Worse still, the reins of the new land market are being handed over to state and municipal authorities in cahoots with local landowning elites. Thus, the project is ”transferring the initiative for selling land, into the hands of the speculator-landowner,” the groups say.
Landowners who could have been forced under the federal programme to turn over idle tracts in exchange for twenty-year government bonds now can hold onto all but their most degraded plots. And those worst parcels of land, ill-suited for productive use, can now be sold for cash.
This has a series of damaging consequences, according to the groups. It increases speculation and destabilises the countryside as land prices rise – and it provides speculators with surplus cash to pump into speculative investments in the ecologically fragile Amazon region.
Despite those shortcomings – and before the pilot project is adequately assessed – Brazil and the World Bank have set about assembling a four-year, one-billion-dollar loan to support the country’s nascent Banco da Terra or ‘Land Bank’. This will replicate the pilot project in other parts of the country.
”Withdrawal of World Bank support from the Cedula da Terra pilot project and its successor, Banco da Terra – in other words, termination of project financing – will be greatly beneficial to the process of land reform and rural income distribution in Brazil,” the groups stress.
The Inspection Panel is weighing the Bank’s response to the charges leveled against it and has yet to recommend to the executive board whether the complaints merit full-scale investigation.
The board has been reluctant to approve such probes in the past and an official source says the Panel, faced with a ”very complex request” when its own future hangs in the balance, could take up to two months to render a recommendation.
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