The Inspection Panel

Transcrição

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The InspectionPanel
Reportand Recommendation
on
SecondRequestfor Inspection
Brazil
Brazil:Land Reformand PovertyAlleviationPilot Project
(Loan No. 4147-BR)
IPN Request RQ99/5
December 17, 1999
INTERNATIONAL BANK FOR RECONSTRUCTIONAND DEVELOPMENT
INTERNATIONAL DEVELOPMENT ASSOCIATION
1818 H Street, NW, Washington, DC 20433, USA
Phone: (202) 458-5200 Fax: (202) 522-0916
INTERNET: http://www.worldbank.org
B.
THE REQUEST
4.
As stated above,this is the secondRequestsubmittedfor the sameproject.The
Panel received the first Request on December 14, 1998 and decided, after
conductingsite visits, consultationsand interviewswith locally affectedpeople,
that an investigationwas not warranted.The Panel did note, however,that
beneficiarieshad emphasizedthe needfor technicaland managerialassistance,
as well as workingcapital,to facilitatethe sustainabilityof the project.The Panel
also stated that its conclusionwas reached"on the basis of the introductionof
improvedrevised terms of the loans,"which, accordingto Bank Management,
shouldincludea "20-yearrepaymentperiodwith threeyearsof grace,and a fixed
interest rate of 4%."4
In addition to that, the Panel was informed that a
subsidized working capital line of credit would be made available to the
beneficiaries.
5.
The new Requestis substantiallybased on similar claims of actualor potential
harm to the beneficiaries.The new Request is supportedby complementary
documentation,which the Requestersclaim is new evidenceor circumstances
5 The
that were not knownto them or to the Panelat the time of the first Request.
Requestersare basicallythe same as those who submittedthe first Request,
namely a group of NGOs collectivelycalled F6rum Nacionalpara a Reforma
Agrdria e Justi9a no Campo(National Forum for Agrarian Reformand Rural
Justice, hereinafterthe "Forum"or "Requesters"),who representrural poor in
Brazil. In addition, the new Request contains many signatures from
representatives of civil society organizations, the Church, professional
associationsand 23 Membersof the Congress(13 Senatorsand 12 Federal
Representatives).
6.
Specifically,the Requestersreiteratethat the project (a) failed to achieve its
objectiveof combatingpoverty;(b) is not beingimplementedas a pilot project;(c)
does not allow its beneficiariesto pay the debt contractedwhen joining the
project; (d) is forcing up land prices in the respective regions; (e) is being
implementedas an alternativeratherthan a supplementto land reformthrough
expropriation;and (f) did not make provision for proper consultation and
informationin terms of the beneficiarygroupsand its representatives.Although
the Requestersdo not expresslylist the Bank policiesand proceduresthat they
believe are being violated, the foregoing allegations, if confirmed, could
constitute,inter alia, violationsof provisionsof OD 4.15 on Poverty Reduction;
OD 13.50 on Project Supervision;and BP 17.50 on Disclosureof Operational
Information.
See, the Inspection Panel, Report and Recommendation on Request for Inspection (May 27, 1999) at
p.6 .
As provided for in IBRD Resolution 93-10/Resolution IDA 93-9, paragraph 14 (d), the Panel shall not
hear "[riequests related to a particular matter or matters over which the Panel has already made its
recommendation upon having received a prior request, unless justified by new evidence or circumstances
not known at the time of the prior request." (Emphasis added.)
2
4
The Inspection Panel
Reportand Recommendation
on
SecondRequestfor Inspection
Brazil:Land Reformand PovertyAlleviationPilotProject
(Loanno. 4147-BR)
1.
On September14, 1999, the InspectionPanel (the "Panel")receiveda second
Requestfor Inspection(the " new Request")relatedto the implementationof the
Brazil Land Reform and Poverty Alleviation Pilot Project (Annex 1). On
September 28, 1999, the Panel notified the Executive Directorsand Bank's
Presidentof receipt of the Request("Registration,"under the Panel'sOperating
Procedures).'
A.
THE LOAN
2.
The US$ 90 million equivalent loan was approved on November 11, 1998.
Accordingto the ProjectAppraisalDocument(PAD),the projectwas designed"to
reduce rural povertyin NortheastBrazil by: (i) increasingthe incomesof about
15,000poor rural familiesthrough improvedaccessto land and participationin
complementary, demand-driven community subprojects; (ii) raising the
agriculturaloutput of landsincludedin the project;and (iii) pilottestinga marketbased approach to land reform in which beneficiariesobtain financingfor the
purchase of suitable propertiesnegotiateddirectly between rural communities
and willingsellers andwhich,if successful,will enablethe Governmentto greatly
acceleratethe pace and lowerthe cost of its programsto improveland accessby
2
the rural poorthroughoutthe Northeastandelsewherein Brazil."
3.
The samedocumentstatesthatthe projecthasfive major components:"a) a land
purchaseaccountto financeland purchaseby rural communityassociations;b)
communitysubprojects-- small grantsto communitiesfor investments,technical
assistance, and start-up activities; c) community development support and
strengtheningincludingtechnical assistanceand training at the state level; d)
projectadministration,supervisionand monitoring;and e) impactevaluationand
dissemination."3
1
2
See The Inspection Panel, Operating Procedures(August 1994) at paragraph 36.
See Brazil: Land Reform and Poverty Alleviation Project, Project Appraisal Document (Apr. 3, 1997)
at p. 2
See Brazil: Land Reform and Poverty Alleviation Project, supra note 2, at p. 2.
C.
THE MANAGEMENT RESPONSE
12.
On November 15, 1999, the Panel received the Management's response to the
new Request ("new Response" -- Annex 2). The Response was due on October
28, 1999. Management claims that "the delay was due to misunderstandingsof
internal procedures" and expresses its regrets.
13.
Fundamentally, the new Response reiterates the points already made in the
Response to the first Request for Inspection, stressing that this project is
considered well designed, "rated by the Bank's Quality Assurance Group (QAG)
as one of the two best practice operations in Latin America and Caribbean
Region." In particular, Management "disagrees that any adverse impacts have
occurred or that any Bank policies or procedures have been violated."
Management also states that the new Request contains no new evidence or
circumstances not known by the Requesters at the time of the first Request.
Since the reasoning underlying the new Request is basically the same as the first
one, Management has elected to focus on the problems related to the properties
listed by the Requesters, attaching a copy of the first Response as a basis for the
analysis of the substantivearguments.
14.
Management denies that project funds are being used to purchase unsuitable
farmlands, although it recognizes that, because it operates in the poorest regions
of Brazil, the project may include areas with "use restrictions." Management
affirms further that, such restrictions notwithstanding, the project has been
designed to provide adequate conditions to generate incomes sufficient to repay
the contracted debt and substantially increase the income and quality of life for
the beneficiaries.
15.
Management does not deny that there might be cases in which "unproductive"
lands were acquired under the project. Management notes, however, that, under
Brazil's legal system, "unproductive" lands mean under-utilized lands, and not
lands that have no productive potential.8 On this issue, Management Response
says that "the large majority" of the farms could not be expropriated under the
traditional land reform program, but notes that "[t]he original design of the project
did not exclude the possibility of purchasing lands that could be expropriated.
Subsequently, however, at the beginning of this year, it was agreed that no
purchasing process would be initiated for any property that could be potentially
expropriated."
16.
Management also dismisses any allegations that the affected communities are
paying inflated prices for the farms. According to the Response, land prices for
the properties acquired under the Project have been significantly lower, in
8
Management's Response, at p.7.
4
7.
To support their claims,the Requestersattacheda copy of the documentation
that was sent by the National Institute of Agrarian Reform (INCRA) to the
Brazilian Senate in late April 1999. According to the Requesters, these
documentsconstitutenew evidencethat would suggestthat some beneficiaries
suffer adverse impactsas a consequenceof Bank'sallegedfailure to follow its
own policies and procedures.The Requestersalso claim that, when the Panel
first visitedBrazil,BankManagementwas awareof the existenceand contentsof
thesedocumentsandfailedto disclosethemto the Panel.
8.
The documentsattachedto the new Request are mainly technical evaluation
reports,known as laudos,that are producedby the project'sregionalTechnical
Units to evaluate the suitability of the lands available for purchase by the
6 These
participantcommunitiesand to establisha priceceilingfor each property.
attachedlaudos referto some30 farms that have alreadybeen purchasedand
are being developedunder the project.There are also written statementsfrom
state-levelofficialson the generalconditionsof projectimplementation.
9.
The Requestersclaim that the attached laudos demonstratethat many farms
purchasedunder the project were either non-productiveor very large. These
properties, it is argued, would qualify for expropriation by the Federal
Governmentunderthe traditionalland reformprogramat a muchlowercost. The
Requestersclaimfurther that someof the farms have severelimitations,such as
inadequatesoil, lack of accessto water, erosionand other problemsthat would
7 It is also contendedthat the project
render them unsuitablefor development.
has paid higherthan marketpricesfor manyof the farms what, besidesinflating
the pricesof rural propertyin surroundingareas,is said to be negativelyaffecting
the borrowingcommunities.
10.
The Requestersalso allege that the terms of the loans offered to the project
beneficiarieshave not improvedsincethe last Panelfield visit. Underthe current
conditions,they contendthat it wouldbe difficultfor the affectedfamiliesto repay
the loans. More specifically,the Requesterssay that the affectedpeople have
not been granted access to PROCERA- a highly subsidized micro-credit
program designed to assist poor rural communities- and that the contract
providesfor interestrates rangingfrom 4% to 6%. The Requestersbelievethat
debt servicingmay provetoo costlyfor the beneficiaryfamilies.
11.
Accordingto the Requesters,many communityassociationswere formed with
the encouragementof local political leadersmerelyto fulfil the requirementsof
project conditions. To illustrate these allegations, the Requesters quote
documentsandotherofficialstatementsby State-levelauthorities.
as usedin this Report,connotesthe documentthat is usedto assessthe qualityof the landand
its environs,sensustrictu,andthe actualvalueof the landin purelymonetaryterms.
7 The project'sOperationManualstatesthat "[pjropertieseligiblefor purchaseand sale shouldoffer the
potentialfor the sustainabledevelopmentof its naturalresourceswith a productioninfrastructureableto
providesupportfor the familiesinvolvedwith low levelsof additionalinvestments."
3
6Laudo,
x
visited an affected area chosen from a list submitted by the Requesters.
Beneficiariesinterviewedat this particular site as well as those interviewed
duringthe Panel'svisit earlierthis year expressedthe opinionthat their livelihood
security has increased significantly under the project. The Panel also
interviewedBank officials in Washingtonand consulted with the Executive
DirectorrepresentingBrazil.
21.
The Inspectorwas asked by the Requestersto interviewsome specialistsat
Universityof Campinas (UNICAMP),who carried out an independentmidterm
evaluationof the project commissionedby the Bank and the Government.The
evaluationcovered52 percentof the 223farms purchasedduringthe initialstage
of projectexecution.The independentresearchersdiscussedtheir main findings
with the Panel.In substance,they assert that it is too soon to makeany definitive
evaluationof the resultsof the project,especiallyin viewof the droughtof the last
few years, one of the worst of the century, which has seriously affectedthe
projectareas. In any event,they expressedsomeconcernsaboutthe degreeof
participationof the beneficiariesin the negotiationof the price for land and about
their awarenessof the terms and conditions of the loans received under the
project.They also stressedthe importanceof the laudos and of the technical
assistancereceived by the communitiesat this stage becauseof the general
absenceof marketreferencepricesfor rural land in the projectareas.Finally,the
researchersnoted that simulationspreparedas part of their evaluationshowthat
in all cases the income generated by farming activities is projected to be
sufficientto cover the beneficiaryfamilies' subsistenceneeds and to allow for
repayment of all debts contractedunder the project. Afterwards the Panel
receivedseparate summariesof the midtermevaluationpreparedboth by the
Federal Government and the Requesters.These summaries by and large
confirmthe informationreceivedin Campinasby the Panel.
22.
14 mentionscertain "technicaleligibility
Paragraph9 of the 1999 Clarifications
criteria".Regardingitem (c) of the referredparagraph,the Panelnotesthat there
is no assertionin the requestthat the new subject matter has been broughtto
Management'sattention by the Requestersand that, in the Requesters'view,
Managementhas failed to respondadequatelyto it, thus demonstratingthat it
has followedor is takingstepsto followthe Bank'spoliciesand procedures.
facilitating the Panel's work and for his comments and guidance. Finally, the Panel wishes to thank the
Requesters, especially the Executive Secretary of the Forum, members of the Congress with whom it met
in Brasilia, the Brazilian Minister of Agrarian Reform and researchers at UNICAMP for their comments.
14 The 1999 Clarifications to the Resolution are contained in the "Conclusions of the Board's Second
Review of the Inspection Panel" dated April 20, 1999.
6
9
aggregate,than the present-valueequivalentpaid for expropriatedproperties.
Managementalso notes that, "when small price differences were observed,
specificconditionsprovidea satisfactoryexplanation[for such price differences]."
In thosecases in whichthe Requesterssay that the pricesare much higherthan
market prices, Managementcontends that such conclusion is based on
erroneous informationprovidedby the state government.Managementargues
that such evaluations were later rejected by the beneficiary communities
preciselybecauseof excessivepricing.
17.
On the terms and conditionsof the loan, Managementaffirms that the project
beneficiariesnow enjoy the same conditionsoffered to the beneficiariesof the
Bancoda Terraproject,which providesfor interestratesof 4% for loansup to R$
Since all loans under the project are under this threshold,the 4%
15,000.00.10
rate applies to everybody. These terms and conditions are said to be an
improvementif comparedwith the previouscontractsand will apply retroactively
to all beneficiariesbefore the first installmentis due. Managementalso states
that projectbeneficiariesare eligiblefor creditunder PRONAF,the programthat
replacedthe PROCERA.
18.
Finally, on the issue of community participation in project design and
implementation,Bank Management asserts that it is satisfied that this
requirementhas been fully met. Accordingto the Response,"the design of the
Projectplaces beneficiariesin the driver'sseat, and its successdependsentirely
1 Managementattaches a list containing some
on their active participation.""
beneficiaries'opinionson the project.
19.
Managementalso addressesthe questionof Bank supervision,which is implied
in the Request.The Responseassertsthat "some 82 staff weekswere used in
Projectsupervisionover a 27-monthperiodwith more than 70% of supervision
time providedby staff of the Bank'sBrasiliaand RecifeOffices."
D.
ELIGIBILITY
20.
The Panel proceededto determinewhether the Request meets the eligibility
criteriaset out in paragraphs12 to 14 of the Resolution. To this end, the Lead
Inspectorof the Panel for this project, Edward S. Ayensu2 on behalf of the
Panel,visitedBrazil.The Inspectorheld a seriesof consultationsin Brasilia'3 and
By "present-valueequivalent"Bank meansthe value paid by Governmentin 20-yearsrecoverable
bonds,discountedby 15% of the face value, which is consistentwith the actual market value of such
bondsin the Brazilianfinancialmarket.
10Managementprovidedthe Panelwith a copyof a Resolutionof the BrazilianNationalMonetaryCouncil
establishingthe rules of the Banco da Terra project (4% interestrate for loans up to R$ 15,000.00).
Managementalso submittedcopy of a letter from the Ministerof Land Reformin which he affirmsthat
these sameconditionswill apply retroactivelyto all Cedulada Terrabeneficiaries.A copyof the letteris
attachedto ManagementResponse.
1 ManagementResponse,AnnexB (g).
12 EdwardS. Ayensu,PanelMember,was assistedby ClaudioVasconcelos,
consultantto the Panel.
13 The Panelwishesto thankthe CountryDirectorand staff for arrangingtheir meetingsand for providing
logisticalsupportduringthe field visit.The Panelalsowishesto thankthe ExecutiveDirectorfor Brazil,for
5
E.
CONCLUSIONS
24.
The Panel is thereforenot satisfiedthat the Requestersmeet all the technical
18
eligibilitycriteriaset forth in the Resolution.
F.
RECOMMENDATION
25.
In light of the foregoing,the Panelconcludesthat the Requestis not eligiblefor
inspection.
Attachments
ResolutionNo. 93-10/ResolutionIDA 93-6, Paragraph13: 'The Panel shall satisfy itself before a
requestfor inspectionis heard that the subject matter of the request has been dealt with by the
Managementof the Bank and Managementhas failed to demonstratethat it has followed,or is taking
adequatesteps to follow the Bank'spoliciesand procedures." See full text at the InspectionPanel
homepage(http://www.worldbank.org/inspection).
1999 Clarifications,Paragraph9: 'if the Panel so
recommends,the Board will authorizean investigationwithoutmakinga judgementon the meritsof the
claimants'request,and withoutdiscussionexceptwith respectto the followingtechnicaleligibilitycriteria:
[.. .] (c) The requestdoes assertthat its subjectmatterhasbeen broughtto Management's
attentionand
that, in the requester'sview, Managementhas failed to respondadequatelydemonstratingthat it has
followedor is takingstepsto followthe Bank'spoliciesand procedures(Resolutionpara. 13)."See, 1999
Clarifications,
availableat the InspectionPanelhomepage(http://www.worldbank.org/inspection).
18
8
23.
On this eligibility question,the Panel notesthat the Requestershave specified
15 as follows:
the actionstakento bringthe issueto the attentionof Management
(i)
The Requestershave sent to the Panelthe transcriptsof a public hearing
held in the BrazilianCongresson June 23, 1999,to discusscertain aspectsof
the project.'6 Accordingto the transcripts,the Bank Country Directorfor Brazil
was invited to attendthe congressionalhearing.In a letterthat was read during
the session, the country director declined the invitation, explaining that the
Bank's Articles of Agreement expressly prevent any of its officers from
participatingin politicalmeetings.
(ii)
The transcripts of the session show that some congresspersonsthat
signedthe Requestwere presentat the congressionalhearing,as were someof
the Forum'smemberorganizations.
(iii) The invitationto the congressionalhearingswas made by the Brazilian
Congress,and not by the Requesters,who participatedin the session.
(iv) The Panel is not satisfied, therefore, that the invitation for the
congressional hearing constitutes sufficient evidence that the Requesters
broughtthe subjectmatterto Management'sattention.
(v) The Requestersdid not providethe Panel with any other evidencethat
they had sought to discuss their concernswith Managementbetweenthe first
7
and the secondRequests.'
(vi) Managementhas providedthe Panelwith evidenceto indicatethat, after
repeatedwritten and telephoneinvitations,the Requesterschose not to meet
with Managementto discussthe project.
(vii) The Requestersstated that such invitationswere declined becausethey
were not involved in the design phase of the project and were not provided
sufficientinformationto makea meetingmeaningful.In the Panel'sopinionthese
claims to support a refusal to discuss these matters with Managementin
advanceof the Requestdo not constitutecircumstancesthat would exemptthe
Requestersfrom the consultationrequirementsset forth in the Resolutionand
the 1999Clarifications.
' 5 See, Resolution,paragraph16.
16 See, D6cimaQuinta Reuniaoda Comissaode AssuntosSocias e VigesimaSegundaReuniaoda
Comissaode AssuntosEcon6micos,da 1' SessaoLegislativaOrdinariada 5 1a Legislatura,transcriptsin
the Panelfiles (in Portuguese).
17 The Requesters
providedthe Panelwith the notesof a meetingheldwith the Bank'sCountryDirectorin
October14, 1998, in Brasilia.Althoughthe Panelnoted the contentsof the document,it is unableto
considerit in the frameworkof the new Requestfor Inspection,for it refersto an endeavorthat has been
alreadyconsideredin the frameworkof first Request.
7
Annex 1
Em primeiro lugar. o pedido de inspec,o do F6rum tinha como base argumentos
suficientespara demonstrar problemas serios que comprometem qualquer sucesso do
projeto e nao obje,ces filosoficas de qualquer natureza. Por outro iado, esta equivocada
a afirma,co da Administra,co de Operac6es do Banco de que a op,ao por uma politica
de "reforma agraria clieniercado"se restringe a uma "...opljo politica do Goi'erno " e
nao diz respeito a ".. irnplemenftaqdoapropriada do Baico de sitas projprias politica* e
procedimentols`(p. 2, item 6 da resposta do Painel encaminhado ao F6rum). Essa
afirma,co da Administrac,o nega abertamente as pr6prias decis6es e
responsabilidadesdo Banco Mundial sobre a politica adeotnd;.
um
De acordo com a Estrategia de Assistenciaao Pais (Country Assistance Strategy
- CAS), relatorion.° 16582-BR,de 12 de junho de 1997, no seu capitulo sobre "O Papel
do Gnrpo Banco Mundial: Desetw'ohvime'nto Social", afirma "O Banico tamnbnt vai
con7siderarnova assistincia nio qufe diz re.speilo a refornia agorria, iniciando com urn
projeto. piloto. Esse testara urm niodelo com maior cutsto-beneficio, de facil
implernentaqio e direcionado ao nercado para reassenlar fanilias. Se obtiver su,cesso,
o Banco apoiara urmprograma de reforma agrciria em irmaescala maior." (Item 57 da
CAS). Portanto,o pedido do F6rum e baseado em questionamentosnao apenas das
decis6esdo Governo brasileiro de criar um ou mais projetos de "reforma agriria
de mercado",mas das decisoes e estrategias adotadas pelo Banco Mundial para o
Brasil.
Em segundo lugar, a afirma,co da Administra,co de Opera,ces do Banco de que
as entidades do Forum Nacional de Reforma Agraria, signatAriasdo pedido, nao
representam os interesses das pessoas afetadas e, no minimo, uma tentativa de
ingerencia politica do Banco sobre as organiza,ces da sociedade civil brasileiras.
Alem de desconsideraras pr6prias regras do Banco - as quais dao o direito a qualquer
grupo ou entidade solicitar a inspe,ao - esse tipo de argumento e um desrespeito a
hist6ria politicadas entidades e movimentos que representammilhoesde trabalhadores e
trabalhadoras rurais, agricultores e agricultoras familiares, e demais segmentos de
popula,6es que tentamsobreviver no meio rural brasileiro.
No dia 27 de maio do corrente ano, o Painel de Inspeao, mesmo reconhecendo
a legitimidadeda solicita,co e a ampla representatividade das entidades signathrias,
apresentou relat6rioao Conselho de Diretores do Banco Mundialnao recomendando a
realizacaoda investigacao.Esta decisao foi considerada, por representantes do Governo
brasileiro e pelo Diretor Executivo do Brasil no Banco Mundial, como um
reconhecimentoda excelenciado projeto.
Apesar dos agradecimentos do Grupo do Painel aos comentariose orienta,oes
do F6rum e solicitantesda Inspecao do projeto, quando da sua visitaao Brasil (Relat6rio
e Recomendavao,p. 3. nota de rodape, item 5), o conteudo da resposta sugere que a
conclusao do Painel teve como principal referencia os comentarios e orienta,ces, do
senhor Murilo Portugal. A resposta tambem sugyereque as informacoesde funcionanios
de govemos estaduais, responsaveis pela implantacao do Cedula da Terra, aos quais
tambem sao dirigidosagradecimentos no documento, sao utilizadosem detrimento dos
argumentose documentosapresentados pelos solicitantes.
Como e publicamenteconhecido, desde o inicio do processo em questao, o
diretor executivo do Brasil vem sistematicamente assumindo posi,co conservadora e
contraria ao pedidode inspeDao.Temndefendido a implementacaoe expansao do projeto
FORUMNACIONALPELA REFORMAAGRARIA
E PELAJUSTIQANO 5iPDQ
S9SEP14 PM5: 15
TtiE,
,,, er osto
de 1999.
Aos
Presidentedo Banco Mundial, Sr. James Wolfensohn;
Conselho de DiretoresExecutivos do Banco Mundial, e
Presidentedo Painel de Inspevao, Sr. Jim MacNeil
WASHINGTON,D.C.
ESTADOSUNIDOS
Prezados Senhores,
O F6rum Nacional pela Reforma Agraria e pela Justiga no Campo, enviou,
no dia 10 de dezembrode 1998, ao Painel de Inspe,co do Banco Mundial,um pedido de
inspecaodo Projeto Piloto de Reforma Agraria e Alivio da Pobreza(projeto n.° 4147BR), popularmentedenominadopor "Projeto Cedula da Terra".
O pedido de inspecao era baseado, entre outros argurnentos,no fato de que o
projeto nao atinge os seus objetivos de combate a pobreza; nao esta sendo
implementadocomoum projeto piloto e, esta sendo implementadocomouma alternativa
e nao um complemento a desapropria,ao por interesse social para fins de reforma
agraria.
O Forum argumentava tambem que as condic6es de financiarnento nao
possibilitavamque seus beneficiarios pagassem a divida contraida com a adesao ao
Projeto. Argumentouainda que o processo de implanta,ao, contrariandoabertamenteas
normas de projetos do Banco Mundial, nao possibilitou a participacao da populacao
beneficiariae seus representantes.
O Banco Mundial, atraves da Administracao de Operacoes, apresentou a sua
resposta ao Painel de Inspesao, no dia 08 de rnarvo desse ano. Para a surpresa do
F6rum, a partir de um pressuposto te6rico de que o projeto 'foi muito bem desenhado"
e, comoprojeto piloto, "apresenftva bom reslitados", a Administra,co de Operacoes do
Banco nao se restringiua responder tecnicamente aos questionamentos.Fez, na verdade,
uma tentativa de deslegitimar politicamente o F6rum Nacional de Reforma Agraria.
afirmandoque 1) o pedido de inspesao era baseado em "argumentosfilos6ficos" e 2)
os signatirios do pedido nao erani legitimos representantes das pessoas e grupos
atingidospelo Cedulada Terra.
Essas novas informacoes, obtidas atraves dos documentos oficiais,comprovam a
pertinencia dos argumentos anteriormente apresentados. 0 F6rum Nacional pela
Reforma Agraria e pela Justica no Campo esta, portanto, encaminhando um novo
Pedido de InsDecioao Painel do Banco Mundial. Acreditamosque esse novo pedido
de inspecao se constitui numa oportunidade para avaliar os graves problemas
constatados,oferecendoinclusiveao pr6prio BIRD, a chance de rever o equivoco de sua
posicao original,em absoluta assimetria com os padroes de austeridade e seriedade da
instituiqao.
E necessarioesclarecerque o F6rum de Reforma Agrariae Justica no Campo nao
esta recusandonenhuma ajuda as milhares de familiasde trabalhadores e trabalhadoras
rurais que lutam pela reforma agraria. As organizacoes da sociedade civil, filiadas ao
F6rum, reconhecema importancia do Banco Mundial frente aos desequilibriosgerados
pelo sistemaecon6mico.Os recursos que serao atribuidos ao Programa Banco da Terra.
portanto,deverao ser destinados aos credito agricolapara as familiasassentadas, criando
recursospara viabilizara permanenciana terra, aerar empregose renda no meio rural.
Segundo a Resolu,co BIRD n.° 93-10/AID 93-06 (que estabelece crit6rios de
funcionamentodo Painel de Inspecao), o grupo do Painel esta autorizado a aceitar
pedidos de inspecao referentes a determinada questao em relacao a qual ja tenha feito
suas recomendacoes. Essa resolucao afirma que um novo pedido e justificado pelo
surgimentode novas evidencias ou circunstancias desconhecidasao tempo do pedido
anterior (Paragrafo 14D). 0 F6rum entende que os documentos apresentam novas
evidenciasque configuram desvio de finalidade do projeto Cedula da Terra. dando
elegibilidadetecnica para essa nova solicitacao.
Diante disso, e ainda, face o conhecimentode novos fatos. todos de fonte oficial,
e incluidos no documento anexo, reivindicamosnovamente a instalagao do Painel de
Inspecao sobre o projeto em consideracao, com base na resolucao do Banco Mundial
que estabeleceo Painel.
Gostariamos de informar ainda aos senhores diretores que o F6rum esta
encaminhando,junto ao Ministerio Niblico, pedido de procedimentoinvestigat6riosobre
as irregularidadesacima mencionadas.
Atenciosamente,
D. Tomas Balduino
SecretArio Executivo
F6rum Nacional pela Reforma Agriria e Justica no Campo
1.
2.
3.
4.
5.
6.
7.
MovimentoNacionaldos Trabalhadores Rurais Sem Terra (MST)
ConfederacaoNacional de Trabalhadores Rurais na Agricultura(CONTAG)
ComissaoPastoralda Terra (CPT)
ConferenciaNacionaldos Bispos do Brasil (CNBB)
Conselhode Povos Indi-enas do Brasil (CAPOIB)
ConselhoNacionaldos Seringueiros(CNS)
ConfederacaoNacionaldos Servidores do INCRA (CNASI)
de financiamentopara compra de terras a despeito de irregularidades e impactos
negativosna implantacaodesse.
De acordo com o proprio Presidente da Rep6blica, Senhor Fernando
HenriqueCardoso, em audiencia publica com liderancasdo F6rum, no dia de 08 julho
de 1999, o senhor Murilo Portugal, representante do Brasiljunto ao Banco, foi instruido
a se opor veementementea instalacaodo Painel. Essa decisao,segundoo Presidente, nao
esta baseada em pressupostos tecnicos, mas no fato de o governo brasileironao admitir
ingerenciasdo Banco Mundialsobre a politicanacional.
0 F6rum compreende que o Banco Mundial, diante de tais circunstancias,
contraria as suas pr6prias normas relativas a proibicao de atividadepolitica, estabelecida
por seu convenio constitutivo. Segundo essa norma "o Banicoe seus finciotndrios niio
podem intervir iias questles poliricas de qcalquer menibro tiem tampouco devem eles
ser influencialos enmsuas cdecisoespelo card/er politico cLomenmbro o0 nienibros
envolvidos. Apesar cotnsiderafoes econ6micas devem ser rele antespara suias decisoes,
paica.;c
s
7?rlvir os
e estas consideraq(es deiven ser ponderadas imparci-ic;;.,
prop6sitos deternfinadosno Artigo I" (BIRD, Convenio Constitutivo,Art. IV, Secao
10).
Diante disso, a expectativa do F6rumr era de que, tanto o Diretor Executivo
brasileirocomo o Painel de Inspecao, enquanto instanciaintegrantedo BIRD, estivessem
subordinado as norrnas do Convenio Constitutivo, preservando-sede toda e qualquer
influencia politica dos governos membros. 0 Painel cumpriria, assim, o prop6sito
fundamental de ser um espa,o independente, ao qual podem recorrer is popula,coes
adversamenteafetadas por projetos do Banco Mundial, garantindo que esse atue de
acordo com as suas pr6prias politicase procedimentos.
Por outro lado, no dia 06 de maio de 1999, foram encaminhadosaos gabinetes da
Senadora Heloisa Helena e do Deputado Federal Valdir Ganzer, documentos do
processo de implanta,co do Cedula nos cinco (5) Estados. Esse procedimentoaconteceu
em resposta aos Requerimentosde Informacao desses parlamentares,encaminhadosao
Sr. Ministro Extraordinariode Politica Fundiaria, Raul Jungman,no dia 02 de marco de
1999. E importantedestacar que os referidos documentos nao foram apresentadospelo
Governo ao Painel de Inspecao e tampouco foram consideradosna resposta do Banco
Mundial.
Como ja era esperado, esses documentos comprovam as denuncias do F6rurn
sobre os problemas do Cedula da Terra, explicitando, inclusive, fortes indicios de
corrupcao, super-avaliacoese favorecimentos no processo de implantacao do Cedula.
Esses documentosexplicitamtambem divercencias entre afirrnac,es do Banco Mundiale
do Governo brasileiro sobre a implantacao do projeto. Apesar da Administrac,o de
Operacoes do Banco, por exemplo, afirmar que terras improdutivasnao estao incluidas
nos neg6cios de compra do Cedula. o processo de implantacao nao faz qualquer
restric,aoa esse aspecto e, pelo contrario, varias areas passiveisde desapropriacaoforam
adquiridas.
Alem dos questionamentos feitos anteriormente relacionados com a nao
participac,o da sociedade civil organizada no processo implantaqaodo Cedula e da
inviabilidade econ6mica do projeto, os documentos apresentados pelo Ministro
Extraordinario de Politica Fundiaria possuem fortes indicios de favorecimento e
corrupcao na implantaqaodo projeto nos diversos Estados.
8. ArticulacAoNacionalde Mulheres Trabalhadoras Rurais(ANMTR)
9. AssociacaoBrasileirade Reforma Agraria (ABRA)
10. Instituto de Estudos Socioeconomicos(INESC)
I1. ConselhoIndigenistaMissionario(CIMI)
12. SecretariaAgraria do Agraria do Partido dos Trabalhadores(PT)
13. CaritasBrasileira
14.ConselhoNacional de Igrejas Cristas (CONIC)
15.MovimentoNacional dos Direitos Humanos (MNDH)
16. Instituto de Formacaoe Assessoria Sindical(IFAS)
17. Departamentode Estudos e Servicos Rurais (DESER)
18. Federa,co de Orgaos para a Assistencia Social e Educacional(FASE)
19. Instituto Brasileirode AnaliseSocioecon6micas(IBASE)
20. ConfederacaoUnica dos Trabalhadores (CUT)
21. Assessoriade Projetos Alternativos (ASPTA)
22. MovimentoNacional de Atingidos por Barragens (MAB)
23. Coordenadoriade Servi9osEcumenicos (CESE)
24. ConselhoNacional dos Servidores Federais (CONDSEF)
25. Grupo de Trabalho Amaz6nico(GTA
26. Rede Brasil sobre Instituic6es FinanceirasMultilaterais
27. Movimentopela Libertacao dos Sem Terras (MLST)
28. Pastoral da JuventudeRural (PJR)
29. Instituto Brasileirode Estudos (IBRADES)
30. Processo de ArticulagAoe Dialogo entre AgenciasEcumenicase seus Parceiros no
Brasil (PAD)
Seguemassinaturasde lideranas e personalidadesrepresentativasda sociedade
brasileira
oferecendo ao pr6prio BIRD, a chance de rever a sua posi,co original,em absoluta assimetriacom
os padr6es de austeridadee seriedade da institui,co.
1. Considerasoessobre os procedimentos do Painelde Inspeaio
Em primeiro lugar, chamamos a aten,co para o fato de que os procedimentosoperacionais
do Painel de Inspecaoforammodificados pelo Conselho de Diretoresdo Banco Mundialno decorrer
do periodo de analise da solicita,co de inspe,co encaminhadapelo Forum em 10 de dezembro de
1998.
Portanto, a solicitacaofoi aceita oficialmentede acordo com os procedimentosoperacionais
do Painel de Inspe,co de Agosto de 1994 e dos esclarecimentosde outubro de 1996, mas foi julgada
com base nos seus novos procedimentosprevistos na segunda revisaodo Painele instituidosem abril
de 1999.
Essa mudan,a trouxe prejuizos para o processo, especialmenteporaue o Painel nao realizou
estudos previos com vistas a indicar ou nao a investiga9ao,como determinavamas regras de 1994. 0
Painel apenasjulgou a elegibilidadeda solicita,co, com base nos seusnovos procedimentos.
Alemdisso, o Painel,por meio da visita de alguns de seus membrosa unidadesdo projeto, no
Brasil, 'avaliou' o projeto, apenas a partir de questoes genericas feitas coletivamentejunto aos
beneficiariosdas associa,6es visitadas, tentando por essa via, procederao cotejo entre as realidades
sociais e econornicasdas pessoas, anterior e posterior ao projeto. A1lm da inconsistenciadesse tipo
de aferic,o, deixou-se de lado a questao central a ser investigada:a compara,ao da situa,io dos
beneficiariosa partir dos objetivospropostos pelo projeto.
2. Compra de ireas passiveis de desapropriaaio
Em primeirolugar, o documento afirma categoricamenteque o Banco Mundialconsidera que
no emprestimotratado e em futuros emprestimosnao foram e nao serao incluidasfazendaspassiveis
de desapropria,co para finsde reforma agraria (item 18 - p. 5).
Apesar dessa afirma,ao taxativa, feita pelo Banco e assumidapelo Painel, os documentos
oficiais do Ministerio ExtraordinAriode Politica Fundiaria, encaminhadosa Camara Federal e ao
Senado, demonstram que essa afirnacao nao e endossada pela govemo, para o qual, o 'Cedula'
admite a compra de areasindependentede serem passiveis de desapropria,co.
De acordo com o Ministerio Extraordinario de Politica Fundiaria"Nao existem restri,ces
quanto a aquisicao de terras desapropriaveis, embora em sua maloria, as areas adquiridas
correspondam a propriedadesconsideradas produtivas e/ou de tamanho inferior ao caracterizado
como desapropriavel"(p. 7). Essa afirma,co deixa claro que o Painelassumiuum discurso que nao
se materializa na implanta,co do Cedula da Terra.
Ainda de acordo com o pr6prio Ministerio Extraordinario de PoliticaFundiaria "0 Projeto
Piloto 'Cedula' da Terra' nao preve vistorias pelo INCRA. E um projeto executadopelos Estados,
com intervenienciados agentes financeiros,o Banco do Brasil e o Bancodo Nordeste" (p. 7).
A ausenciade vistoriapelo INCRA nao permite a aferi,ao dos dados e criterios fixados pelos
laudos tecnicos 'terceirizados', que embasam os pre,cos atribuidos A'terra nua' e as 'benfeitorias'.
Estes, em grande parte dos casos, mostram-se ostensivamente fraudulentos,como por exemplo
laudos que de tao semelhantesparecem c6pias; laudos emitidos com a total ausencia de elementos
FORUMNACIONALPELA REFORMAAGRARIA
E PELA JUSTIQANO CAMPO
PROGRAMA CtDULA DA TERRA
Projeto Piloto de Reforma Agriria e Alivioda Pobreza
(n.° 4147 BR)
0 F6rum Nacional pela Reforma Agraria e pela Justi,a no Campo, enviou, no dia 10 de
dezembro de 1998, ao Painel de Inspe,co do Banco Mundial, expediente contendo arrazoado
indicando a ocorrencias de serios desvios de finalidade na execucao do Projeto 'Cedula da Terra',
em implantacao em cinco Estados da Regiao Nordeste do Brasil, como fundamento para a
solicita,caode investiga9Aodo referido projeto. Entre os argumentosarrolados,destacamos que:
* o projeto nao atingiaos seus objetivos de combate a pobreza;
-
nao estava sendoimplementadocomo um projeto piloto;
-
nao possibilitavaque seusbeneficiariospagassem a divida contraidacom a adesao ao Projeto;
-
o projeto contribuiupara o aumento do pre,o da terra nas respectivasRegioes;
*
estava sendo implementadocomo uma alternativa e nao um complementoa reforma agraria via
desapropriagao;
*
nao possibilitou a consulta e inforrma,ao adequada para a popula,co beneficiaria e seus
representantes.
No dia 27 de maio do corrente ano, o Painel de Inspe,co apresentou relat6rio ao Conselho
de Diretores do Banco Mundial recomendando a nio realiza,io da investiga,co solicitada pelo
F6rum. Esta decisio foi considerada, por representantes do Governo brasileiro, e pelo DiretorExecutivodo Brasilno Banco Mundial,como um reconhecimentoda excelenciado Projeto.
Com o respeitomerecido pelos membros do Painel que analisaramo caso, o F6rum entende
que as falhas observadasnos procedimentos de instru,co do processo, conformesera demonstrado,
na sequencia, refletiram-se diretamente no conteudo da resposta apresentada aos diretores
executivos do Banco Mundial e ao F6rum. Mais grave, ao nao atentar, para casos explicitos de
anormalidades eticas e morais na conducao do projeto, a decisao do Banco Mundial, por
recomenda9aodo seu Painelde Inspeqao, coloca a instituicaosob suspei9ao.
Este novo Pedido de Inspe.ao, ocorre com a inclusao de informa9oesconstantes de respostas
do Sr. Ministro Extraordinirio de Politica Fundiiria aos Requerimentosde Informacao, formulados
pela SenadoraHeloisaHelena e pelo Deputado Federal Valdir Ganzer. Como veremos abaixo, esses
documentos comprovam as denuncias do F6rum sobre os problemas do Cedula da Terra,
explicitando, inclusive, divergenciasentre afirmac6es do Banco Mundial e do Governo brasileiro
sobre a implantacaodo Programa.
Acreditamos,mesmo, que, com esse novo pedido de Painel de Inspec,o patrocinado pelas
entidades integrantesdo F6rum Nacional pela Reforma Agriria e pela Justica no Campo, estamos
de 1999, pelo Banco Central atraves da Resolucao BACEN n.° 2.610/99, que preve em seu Art. 1°,
Inciso V - encargosfinanceiros:atualizacao cor base no Indice Geral de Precos - Disponibilidade
Interna (IGP-DI), da Fundacao Getulio Vargas (FGV)., acrescida das seguintes taxas de juros,
aplicaveisem fun,ao do montante de financiamentopor beneficiario:ate R$ 15.000,00 (quinze mil
reais): 4% a.a. (quatro por cento ao ano); acima de R$ 15.000,00 (quinze mil reais) e ate R$
30.000,00 (trinta mil reais): 5% a.a. (cinco por cento ao ano); acima de R$ 30.000,00 (trinta mil
reais) e ate R$ 40.000,00 (quarenta mil reais): 6% a.a. (seis por cento ao ano); VI - rebate:
aplicavel sobre os encargosfinanceiros e exclusivamentequando os pagamentos forem efetuados
ate os respectivosvencimentos,respeitado o teto de R$ 500,00 (quinhentos reais) por montante de
parcela paga anualmente,bem como observados os seguintes limites:a) 50% (cinquentapor cento)
nas regioes mais pobres; b) 30% (trinta por cento) nas regi6es intermediarias;c) 10% (dez por
cento) nas demaisregioes; VII - remunera,co dos agentes financeiros:1% (um por cento) sobre o
valor total do credito, cobravelna data de sua abertura, e 1% (um por cento) sobre o valor de cada
prestacao a receber.
Varias organiza,ces e entidades da sociedade civil executaramuma serie de projecoes, a
partir das condicoesde financiamentoapresentadas pela resolu,co do Banco Central e concluiram
que a divida e impagavel.As planilhas revelaram tambem a dificuldadedas organizacoes, mesmo
assessoradas por tecnicoscompetentes, em chegar a um resultado comumquanto a prestacao que o
beneficiario devera pagar. Isso porque o governo nao divulgou a f6rmula que vai utilizar para os
calculos das prestac6ese do custo final do financiamento.A margemde diferencaentres os calculos
nao invalidaas proje,c6es.Sao diferen,as insignificantesdiante do consenso de que o financiamento
inviabilizaa propriedadee a vida dos beneficiarios.
Assim,nas proje,6es, partindo de um desenho comum (um financiamentono valor de R$ 15
mil, o IGP-DI e a taxa inflacionaria,ambos, de 4% a.a.) os valores totais pago pelo beneficiario
sofrem uma variacao entre 30% a 45% superior ao valor financiado.Deve-se ressaltar que a
impossibilidadede cumprimentodo contrato financeironao ocorre exclusivamentepelo econ6mico,
mas pelo tipo de produ,ao que o beneficiario, com o perfil de um despossuido,vai realizar, alem da
sua produ,co de subsistencia,com um recurso minimo.
Se nao bastasse esse problema, diferentemente ao que foi respondidopelo Banco, ao Painel,
os beneficiariosdo projeto ainda nao tiveram acesso ao credito do PROCERA.
3. Problemas e irregularidades no processo de implantasao do Cedula
0 Acordo de Emprestimo, firmado .entre o Govemo brasileiro e o Banco Mundial,
estabeleceu algumas clausulas que permitem ao Banco cancelar o emprestimo. Entre essas
condicionalidadesconsta "(c) em qualquer epoca, o Banco determinar, em relacao a qualquer
contrato a ser financiadocom o produto do Emprestimo, que representantesdo tomador ou de um
beneficiario do Emprestimotenham se envolvido em praticas corruptas ou fraudulentas durante o
periodo de aquisic,es ou durante a execucao do referido contrato..." (Art. 10,Secao 1.01, Alinea d,
item c, p. 4)
Conforme dito antes e, em seguida demonstrado, os documentos enviados pelo Ministro
Extraordinario de Politica Fundiaria adicionam elementos que permitem a constatacao de
irregularidades irrefutaveisno processo de implanta,co do Cedula da Terra. Esses fatos indicam
desvio de finalidadedo projeto, o que segundo o pr6prio contrato de financiamento,ja justificaria o
seu cancelamentounilateralpor parte do Banco Mundial.
tecnicos que os respaldem;laudos sem identificaqaoou sem a assinatura dos responsaveistecnicos,
alem de outras irregularidadesposteriormente demonstradas.
Ainda nessadirec,o, o Oficio n.° 372/99, de 7 de abril de 1999,da Gerencia de Planejamento
e DesenvolvimentoEconomico do Estado do Maranhao dirigido ao Coordenador Executivo do
NEAD/MEPF, afirma que nao houve vistoria previa nas cinquenta propriedades adquiridas no
Estado, mas que pelos dados coletados, "oito propriedades eram passiveis de desapropriacao por
interesse social" (p. 1). Isso significaque quase 20% das propriedadesadquiridasno Maranhao eram
passiveisde desapropria9aopara fins de reforma agraria.
A dispensade vistoria, principalmentepelo INCRA, ademais de constituir-se em estimulo As
fraudes e outras irregularidadeslesivas ao erario e aos trabalhadores adquirentes das terras, nao
permite a avalia,co criteriosa sobre a produtividadedas Areas.Ainda assim, e possivel perceber, na
documentaqao enviada pelo Ministro, muitos casos, como veremos abaixo, em que o projeto
adquiriu varios im6veis de um mesmo titular, envolvendo areas corn. milhares de hectares,
absolutamenteimprodutivas,isto e, sem qualquer benfeitoriaiutilou necessariano im6vel.
Fatos dessa natureza reforgam a tese sustentada pelo F6rum sobre os vicios de origem de
programas de intervencao na estrutura fundiaiTa,a exemplo do "Cedula", baseados na sistematica
de compra e venda da terra, que findam transformando-os em 'balcoes' de grandes neg6cios para o
latiffundioimprodutivo que, enquanto sob a egide da desapropriacao, no caso brasileiro, seriam
indenizadosem TDAs, resgataveis em ate 20 anos, passam a ser pagos, em dinheiro,e a vista.
2.2 - Participaafioda sociedade civil na implementacaodos projetos
O Relat6rio do
Painel de Inspecao afirma que o Banco Mundial mostrou evidencias de
esfor,os com vistas a informar e a consultar os potenciais beneficiarios(item 20c, p. 6), o que
demonstra uma desconsidera,co As diretrizes do Banco Mundial em rela,ao A participac,o da
sociedade civil. Em primeiro lugar, a questao nao esta relacionada com consulta e informac,o mas
participa,co efetiva dos beneficiarios, organizag6es e entidades da sociedade civil interessadas no
processo de concep,ao e implantac,o de projetos.
O oficiodo 6rgao do governo do Estado do Maranhao, mencionadoacima,deixa claro que
"as representag6es dos trabalhadores rurais nao estao formalmente envolvidas nas instancias
colegiadas do Cedula da Terra" (p. 3 - item 7.2). 0 mesmo acontece nos demais Estados,
demonstrando que nao ha uma participacao efetiva da sociedade civil na implementacao desse
Programa.
2.3 - Condis6es de pagamento das terras
O relat6rio do Painel assinala que o Ministro da Reforma Agraria alterou as regras de
pagamentoda terra para melhor, fixandoo prazo para 20 anos com tres de carenciaejuros de 4% ao
ano (item 22 - p. 6). Essa afirma,ao carece de fundamentacao, pois, ate esta data, o Governo
brasileiro, nao fez qualquer alteracao nas condicoes de pasaamentodo emprestimo.0 documento do
Sr. Ministro Extraordinario da Politica Fundiaria, em resposta aos Requerimentosde Informac,es
citados, assume outra posic,o, bastante diversa daquela prometida aos membros do Painel. Diz o
Ministro, "Desde o final de 1998, estao em curso negociaq6es para revisao das condi,ces de
financiamentodo Cedula da Terra, ajustando-asas mesmas condicoesdo Banco da Terra..." (p. 10 item 5.5).
Essa declaracaoindica que as condic6es de encargos do Cedula da Terra deverao aproximarse das fixadaspara o Banco da Terra. As formas de financiamentoforam definidas,em 08 de junho
A - ESTADO DA BAHIA
No Estado da Bahia, foram 'beneficiadas' 2.025 familias,envolvendo43 associag6es e RS
8.8 milh6es. Os Relat6rios enviados, de tao precarios, impedem conclus6es mais consistentes.
Destacamos:
Precariedadedos Laudos Tecnicos para a definiSaodos presos da terra
1. Quando muito, os laudos de avalia,co que definiramos precos da terra levaram em conta,
exclusivamente,a identifica,aoda 'classe' ou do 'tipo de solo' da propriedade(Anexos 2, 3, 4, 5, 6,
7, 8, 9, 10, 11, 12, 13, 14) . Em muitos dos laudos, os precos das terras foram fixados apenas com o
registro de algumas'perolas', como: "solo predorninantede primeira"(Anexos I e 16);
Laudos "fantasmas"
2. Muitos laudos foram emnitidossem as assinaturas dos respectivos responsaveis tecnicos
(Ex.: Anexos I e 2);
OpsAopreferencial pelo latifuindioimprodutivo
3. Pelo menos 14 im6veis vendidos ao 'Cedula da Terra' nao tinham qualquer benfeitoria
(100% improdutivos),perfazendo, no conjunto, uma area de 12.756ha, o correspondentea 34% da
irea total adquiridaatraves do programa, na Bahia. Enfatizamosaue nos referimos, exclusivarnente
improdutivos,impossiveisde
is areas 100% improdutivas,ressalvados, portanto, os demais imnoveis
identificacaopela documenta,co do INCRA dada a precariedade dos laudos tecnicos (Ex.: Anexos
3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14);
Latifundioimprodutivo: 0 Cedula da Terra
6 um excelenteneg6cio para os bancos e industrias
4. A empresaDuraflora dos grupos Duratex e Banco Itaii, de Sao Paulo, vendeu 6 imoveis
para o prograrna, todos, totalmente improdutivos, com krea cumulada de cerca de 6.106 ha,
equivalentea 16% da area total adquirida pelo Cedula da Terra na Bahia,localizadosnos Municipios
de Conde e Esplanada(Anexos4, 6, 7, 8, 9 e 10);
5. Igualmente,a empresa Cia. de Ferro Ligas da Bahia - FERBASA,vendeu ao proarama,
3.675 ha de terra totalmenteimprodutiva,correspondente a tres im6veislocalizadosnos Municipios
de Entre Rios e Esplanada(Anexos 12, 13 e 14);
6. Somadas, as kreas vendidas pela Duraflora e Ferbasa, equivalema 26% de toda a area
adquirida pelo programano Estado, em considera,co;
Super avaliasao da terra nua e benfeitorias
7. As discrepanciasentre as avaliaq6es sao marcantes sugerindocasos de superavaliacao de
im6veis. Precos de terra nua variam de R$ 37,00 a R$ 350,00 e, na mesma fazenda, a solos
diferentes sao atribuidosos mesmos valores;
8. Sao constatadasdiscrepancias,tambem, na avaliaqaode benfeitorias,a exemplo de cercas
de arame que tem os precos variando de R$ 400,00/km a R$ 1.900,00/km,sem identificar-se o
namero de fios; (Anexo 15 e 17);
4. 0 custo do Cedula da Terra e o prop6sito de "aliviara pobreza"
De acordo com a avalia,co do Painel, "tanto o Requerente (o Forum) como a Resposta (o
Banco Mundial) concordam no objetivo geral do projeto - redu,cao da pobreza rural - mas
discordam nos meios especificospara alcancaresse objetivo" (item 9 - p. 3)'. Essa interpretacao nao
esta correta, especialmenteporque os questionamentos do F6rum ao projeto se referem, acima de
tudo, sobre os seus objetivos.
0 F6rum continua afirmado categoricamente que o resultado do 'Cedula' sera um maior
empobrecimentodas popula,ces e apela para que o BIRD considere essa compreensao,pois estamos
nos referindo a pessoas que se encontram nos limites da miseria e que somente a insensibilidade
humana pode julgat-lascom capacidade de pagamento desses creditos oferecidos para compra da
terra, financiamentoda produ,co, servi,os e infra-estrutura.
Por outro lado, o F6rum entende que a pobreza deve ser erradicada atraves de programas
econ6micos e sociais que construam a cidadania, onde sobressai, em importancia, a realizacao de
uma verdadeirareformaagraria.
Ademais,o Painel tambem nao atentou para a denuinciade aumento do preco da terra em
fiunco do Projeto 'Cedula' da Terra'. No entanto, mais uma vez, as informac,es encaminhadaspelo
Governo ao Parlamento reforcam indicios anteriormente encontrados. No Maranhao, diz o
documento anteriormente citado, "os pre,os medios das avaliac6es realizadas pelo INCRA no
exercicio de 1998, situavam-sena faixa de R$ 82,00, enquanto as aquisitoes do 'Cedula' atingiram,
em media, R$ 152,00por hectare" (item 7.1 - p. 3).
Essa constatacao, realizada pelo pr6prio organismo responsavel pela implanta,co do
programa no Estado do Maranhao, ao encarecer o custo da terra questiona a viabilidade do
programa ao penalizareconomicamenteas familiasbeneficiadas.
A constata,co acima,demonstra o equivoco em que se houve os protagonistas desse projeto,
asseverando que, diversamenteda desapropriarao, esse tipo de instrumentode compra e venda de
terra estaria imunea corrupcao que em muitos caso implica na superavaliacaodas terras!
5. A ImplementaSaodo programa nos Estados: Analise documental
Seguem as informa,coesextraidas da documentacao enviada pelo Ministro Raul Jungman em
resposta ao Pedido de Informa,ces solicitadopela Senadora HeloisaHelena e pelo Deputado federal
Valdir Ganzer, acerca da execucao do Cedula da Terra nos Estados da Bahia, Minas Gerais,
Maranhao Pernambuco e Ceara. Os dados evidenciam os desvios de finalidade na execucao do
programa e dao substanciaao presentePedido de Painel de Inspe9co.
As irregularidades destacadas acham-se devidamente amparadas pelos anexos
correspondentes, extraidos da documentacao oficial do governo brasileiro sobre a execucao do
Cedula da Terra, enviadosaos parlamentaresreferidos.
*Both tiheRequestand Responseagree on the overall objective of the project - reducing rural poverty - but disagree
on the specific means to attain it". Item9. p. 3 da resposta do Patinelao Bancoe F6rum.
sendo explorada,a exce,co de algumas reses bovinas a solta" (p. 1) (anexo 4);
9. A Fazenda Gado Bravo (area total de 1.532 hectares) tinham 610 hectares de area
aproveitavel nao utilizada (38,92% da area total) e outros 300 hectares (19,58% da area total) de
pastagem naturais,especialmenteCerrado e camposgerais (anexo 2);
10. A Fazenda Sao Vicente da Direita (area tota! de 1.364 hectares) tinha 390 hectares
(28,59% da area total) de terras impr6priaspara o cultivo e 303 hectares de terras aproveitaveisnao
utilizadas(22,21% da area total ou 31,10% da area aproveitavel);
11. As FazendasCaliforniaI e II (area de 1.373 hectares cada uma) foram desmembradasda
antiga FazendaRamalhudoMArtires(area total de 4.840 hectares) e adquiridaspor duas associacoes
diferentes. Estas duas fazendas sao compostas, cada uma, de tras glebas de areas nao contiguas. A
Fazenda CaliforniaII tinha 200 hectares de pastagem natural (14,56% da area total) e 371 hectares
de terras aproveitaveisnao utilizadas (27,02% da area total). Nao tivemos acesso a um dos laudos da
Fazenda Calif6rniaI, mas como os laudos sao identicos, podemos supor que essa tambem tinha um
baixissimoindice de produtividade.
Cedula financia, compra latifiundiosimprodutivose
"impossiveis"de serem produtivos
12. de acordo com a analise dos Laudos apresentados, algumas areas nao tinham condic6es
tecnicas ou necessitamde muito investimento Darase tornarem produtivase garantir a sobrevivencia
das familias;
13. na Fazenda Maraba II, por exemplo, situada em regiao semi-arida, corn quase 2 mil
hectares, segundo.o laudo tecnico, "nao existe agua disponivelpara irriga9Ao,uma vez que toda a
agua e consurnidapelo projeto de irrigacao do lado esquerdo do Rio Gorutuba..." (p. 1 - item 5). 0
laudo da SUDENORafirma a existencia de um po,o tubular com vazao de 25 mil litros por hora (p.
2), mas o Laudo da EMATER menciona apenas a vazao de 12 mil litros por hora, suficienteapenas
para consumo humanoe animale conclui "ressaltamos que a regiao e ruim para agua subterranea."
(p. 5) (anexo 5).
14. a aquisicaodessas areas, e de outras em situa,co semelhante,contrariamas condi,ces de
elegibilidade,pois, segundo o Manual de Opera,6es do programa, emNMinas Gerais, sao areas
pr6prias para o programaaquelas que tem, entre outras condic6es,"...condi,ces de acesso, aguadas,
razoavel infra-estrutura"(item e - p. 5);
15. algumasareas tinham solos fracos, o que exigira altos investimentos.Segundo os laudos
tecnicos, as Fazendas Acary (124 ha) e Vargem das Canoas (639 ha), adquiridaspela Associacao
Comunitaria de Minifiindistasde Pint6polis possuem serias limita,oes de uso. 0 laudo da Acary,
(anexo 3) analisando a fertilidade aparente dos solos, conclui que "As terras III (28,2% da area)
apresentamde moderadasa severas limitac6es ao uso. Requerem medidasintensivasou complexas,a
fim de poderem ser cultivadas (...) As terras da classe V (71,8% da area) nao sao cultivaveiscom
culturas anuais, mas podem, com seguranca e durabilidade ser usadas para producao de certas
vegetacoes uteis (forrageiras) permanentes, sendo especialmente adaptadas para reflorestamento e
pastagens" (p. 2 - item 6.b)
16. 0 laudo tecnico da Fazenda Vargem das Canoas traz um diagn6stico semelhante
afirmando que "As terras da classe VI (65% da area) apresentam severas limitacoes que as tornam
inadequadaspara culturasanuais" (p. 2 - item 6.b).
17. esse diagn6stico levou o tecnico da EMATER a concluir que as terras,
'...quando
B. ESTADO DE MINAS GERAIS
Laudos de Avafiacaomultiplose com datas posterioresa compradas terras
1. As 17 areas adquiridaspelo programa Cedula da Terra em Minas Gerais em 1998 tiveram
dois laudos. Um laudo foi elaborado pela SUDENOR e outro por agentes credenciados, em sua
maioria, elaborados por tecnicos da EMATER-MG. Todos os laudos tecnicos dos agentes
credenciados,com excecaode um uinico,possuem datas posteriores ao dia da data de aquisicao (As
datas de aquisicaoconstamno anexo I e vejam, por exemplo, o Laudo Tecnicodo anexo 4).
2. Esses laudos tecnicos deveriamavaliar, por exemplo, a capacidadede suporte do im6vel,
recursos naturais, fertilidade dos solos, etc. Segundo o pr6prio Manual, o Agente Credenciado
deveria realizar "...levantamentodos recursos naturais para verificara adenua,caoda capacidade de
suporte do im6vel ofertado, ao nuimerode beneficiarios" (p. 7 - Item ii). A elabora,ao posterior
explica, inclusive, porque os laudos indicam exatamente o niumero de familias que foram
efetivamentebeneficiadas.
S. Hi casos, inclusive, que o pr6prio tecnico que elaborou o Laudo menciona, no item
referente a capacidadede suporte o mesmo nuimerode familias que ja estao no projeto. 0 Laudo
Tecnico da Fazenda Formosa (antiga Fazenda Gado Bravo) diz, no seu item 9 (Deterrrina,ao de
capacidade de suporte - n.° de familias- em concordancia com os itens 6, 7 e 8), "As familias,ji
existentes no projeto, poderiamter condi,6es de subsistir e gerar excedentena propriedade" (p. 3)
(anexo 2).
4. Alguns laudos afirmam explicitamenteque foram realizados apos a aquisi,co ca area e
instalacao do projeto. 0 Laudo T6cnico da Fazenda Acary - Municipiode Pint6polis, por exemplo,
esta datado do dia 09/12/98 e a data de aquisicao foi 18/03/98.0 pr6prio tecnico agropecuario que
elaborou o referidolaudo observa que "O presente laudo foi elaborado ap6s o projeto ii estar em
implantag,co"(p. 4). (anexo 3)
Laudos conflitantes
5. Alguns Laudos Tecnicos (dos Agentes Credenciados) entram em contradigao com os
Laudos de Vistorias elaborados pela SUTDENOR.0 laudo da Fazenda Sao Vicente da Direita,
Municipio de Montes Claros, elaborado pela SUDENOR menciona uma irea de "...litossolo
constitui a serra de 390 ha, impr6prioao cultivo" (p. 2), enquanto o laudo tecnico mencionaapenas
30 hectares de area inaoroveitavele outros 303 hectares de terras aproveitiveisnao utilizadas (p. 1 item 5) (anexo4).
0 latifuindioimprodutivotransforma-se em excelenteativo financeiro
6. Sete (7) im6veis dos dezessete (17) adquiridos em 1998, possuem ireas maiores do que
mil hectares. Alemda extensao,varios im6veisnao tinham atividadesprodutivasquando do processo
de negociagaocom as associa,ces.
7. A FazendaLagoa da Solidao(area total de 1.160 hectares) tinha uma area de 578 hectares
(49,83% da area total) de irea aproveitavel nao utilizada,
8. A Fazenda Espirito Santo (area tota! de 774 hectares) nao tinha qualquer atividade
produtiva. 0 imovel tinha, segundo Laudo da SUDENOR, "...vegetacao abundante, apresentando
aspecto de abandonada, por falta de cuidados e cultivos. Nao ha nenhuma atividade econ6mica
7
Areas passiveis de desapropriaaio
5. pelo menos, oito (8) areas, de um total de 50 irn6veis adquiridos, eram passiveis de
desapropriacao por interessesocial para fins de reforma agraria.
Super avaliaao das terras
6. os laudos de avalia,co permitem destacar quatro (4) areas, pelo menos, cujo custo medio
por hectare situa-seem patamaresbastante superiores ao mercado. A Fazenda Belmonte, municipio
de Bacabal, foi comprada por RS 311,39/hectare. A Fazenda Boa Vista do Acarai, municipio de
Balsas, por R$ 204,55; a Fazenda Sitio Campinas, municipio de Sao Luis, por RS 755,67 e a
Fazenda Alegria,municipiode Gon,alves Dias, por R$ 250,54/hectare.
7. e possivelperceber tambemuma discrepanciagrande entre os precos da terra, pesauisados
entre as entidades citadas.No caso da Fazenda Boa Vista do Acarai,os precos levantados variam de
R$ 75,90 a R$ 250,00 o hectare. 0 mesmo ocorre com a Fazenda Tancue que tem uma variacao de
R$ 80,00 a R$ 300,00 o hectare. E importante observar que, na maioria dos casos, os pre,os
fornecidos peloC.R.I./PresidenteDutra, sao sempre os valores maisaltos.
8. o caso do imovel.Sitio Campinas e emblematico porque o valor medio por hectare,
segundo a pesquisa local, ficou em R$ 1.125,00. Esse valor foi questionado pelo pr6prio tecnico
responsavel pelo laudo, alias, uma das poucas avaliac,es nao subscritaspelo engenheiro agr6nomo
Eriberto Batista. Como vimos acima, o imovel acabou sendo adquiridopor R$ 755,67 o hectare.
Monop6liona emissio e outras irreaularidadesnos Laudosde AvaliaSAo
9. as analisesde solos dos 50 laudos apresentam a mesma avalia,co: "constitui,co francoargilosa, rico em materia organica, apresentando media fertilidadenatural e com boa capacidade de
reten,co de agua";
10. o engenheiro agr6nomo Eriberto Batista da Silva foi responsavelpor, no minimo, 36
laudos tecnicos;
11. seis (6) laudos tecnicos nao possuem a assinatura do tecnicoresponsavel;
12. poucos laudos estao acompanhados da respectivas plantas descritivasda localiza,ao do
im6vel.
13. o caso da Fazenda Maracassurnm(o relat6rio eeral denomina de Fazenda Sao Rafael),
localizada no Municipiode Viana, e importante porque o pr6prio relat6rio da vistoria recomenda
"uma nova demarcacaoda area, visto que os seus limites e confrontacoesexistentes nas plantas e
memorial descritivo,nao condiz com a realidade encontrada no campo, havendodivergencia quanto
a area e perimetro. Alem disso, as pecas tecnicas apresentadas estao fora das normas e
procedimentos adotadospelo 6rgao estadual de terras" (parte IV, p. 6).
14. o caso da Empresa Comercial Agropecuaria e Industrial do Rio Munim, localizada no
municipioPresidenteVargas, tambem e emblematico.Essa empresafoi responsAvelpela venda de 9
areas, totalizando 3.679 hectares. Os laudos de avaliac,o constataram que 3.320 hectares eram
"areas aproveitaveise nao utilizadas", ou seja, 9 0% da area total das fazendasera improdutiva. A
empresa recebeuum total de RS 253.890,00 pelas areas vendidas.
I0
utilizadas para culturas, necessitarao de praticas intensivas, tais como: terraceamento, pesadas
adubac6es, correc6es, drenagem e irriga,co em zonas de precipitacao insuficiente" (p. 3). Isso
permite concluir que, associado a falta de recursos hidricos, essas terras irao requer altos
investimentos,inviabilizandoa sustentabilidadedo projeto de assentamento.
18. esses casos nos permitem concluir que areas impr6prias para a producao agricola, ou
areas que exigemum alto investimento,foram adquiridas para assentar familiasbeneficiadas com
recursos do Cedula da Terra. Essas aquisic,es contrariam as orientac,6esdo pr6prio Manual de
Opera,ces quando afirma "Os imoveis eleziveis para compra-e-venda deverao apresentar
potencialidadede explorac,o sustentavel de seus recursos naturais e infra-estruturaprodutiva capaz
de, com baixo nivelde investimentoadicional,dar suporte is familiasdemandantes"(p. 5).
C. ESTADO DO MARANHAO
Segundo as informacoesenviadas pelo Ministro Jungmann,foram adquiridas 50 areas pelo
Programa Cedulada Terra (total de R$ 5.242.678,99), para beneficiar1.591 familias.
0 Cedula da Terra elevou os precos da terra
os pregos medios por hectare praticados pelo Cedula superaram os precos medios das
avalia,ces realizadas pelo INCRA no exercicio de 1998. Segundo o Relat6rio do governo, as
desapropriacoesdo INCRA se situaramna faixa de R$ 82,00/hectare,enquanto que as aauisicoes via
Cedula da Terra atingiramem media R$ 152,00/hectare, ou seja, 185% superior aos pre,os das
desapropria,ces (ver relat6rioanexo).
Nao ha credito para produgio nem assistenciatecnica
2. as familiasbeneficiadasnao tiveram acesso ao PROCERA e assistenciatecnica. Segundo o
relat6rio estadual, 37 a7reasforam habilitadas para receber o PROCERA, mas nao houve qualquer
liberacao ate 7 de abrilde 1999. Tambem nao existe um programaoficialde assistenciatecnica, nem
aloca,co de recursos especificos para essa assistencia, visando atender as familias assentadas nos
projetos.
Ausencia da participacAoda SociedadeCivil
3. nao houve participacao da sociedade civil organizada no processo a implantacao do
'Cedula' no Maranhao.Segundo o pr6prio relat6rio, as representa,6es dos trabalhadoresrurais nao
estao formalmente envolvidas nas instancias colegiadas do Cedula da Terra, entretanto, alguns
sindicatos demandame acompanhamos trabalhos em nivel de campo.
Associacoes de ocasiao
4. muitas associacoes foram formadas apenas para cumprir as formalidadesdo 'CeduIa'.
Pelas informacoesoficiaisfornecidas, 14 das 50 associac6es registram um tempo de existencia de
apenas I ano. A falta de organizacao compromete seriamente as possibilidadesde sobrevivenciadas
familiasbeneficiadas.
exemplo de Areaonde se constata, pelo menos, baixa produtividade.Segundo o laudo de avaliacao,
1.408 hectares eram de pastagens naturais, ou seja, 54,09% da sua area total (2.602,7 ha),
significando,pelo menos, baixa produtividade. Alem disso, 369 hectares eram de area aproveitavel
nao utilizada,caracterizandoa nao produtividadede, pelo menos, 14,18%da area total.
8. A Fazenda Vale da Boa Esperan,a, mencionada acima, segundo o laudo de avaliacao em
anexo, tinha 230 hectares de pastagens naturais, ou seja, 20,28% de sua area total. Tinha tambem
197 hectares de area aproveitAvelnao utilizada (17,73%). 0 restante da area (total de 1.134,00 ha)
eram de 480 hectares de pastagem artificial(42,32%) e 227 hectaresde preserva,co legal (20%). Na
melhor das hip6teses,a Areade pastagem artificial e a AreaaproveitAvelnao utilizada, ou seja, 38%
da Areatotal, significambaixa produtividadedo im6vel.
E. ESTADO DO CEARA
E importante observar, em primeiro lugar, que o ProQramaCedula da Terra exigiu a
Hipoteca do Im6vel Adquiridocomo garantia do financiamentoda compra das terras.
Elabora$Aodos Laudos e avaliacio da situa$Aodas familias
1. Ao comentar o quesito sobre vistorias o agente publico faz a seguinte afirma,ao: "Tendo
em vista que o programa fornece As comunidades os melos necessarios ao desenvolvimento
sustentAveldos im6veis, conclui-se que os assentados tem capacidadede pagamento da terra e de
melhorarem substancialmentea sua condi,co socio-econ6mica,principalmentea qualidadede vida."
(p. 2 do documento de resposta) (anexo 1)
2. Em que pese o 6bvio otimismo do agente publico em rela,Aoas perspectivas do Cedula da
Terra no Ceara, vale ressaltar que as informa,ces contidas nos laudos de avalia,co realizados pelo
IDACE nao permitema conclusao acima. Os laudos contem tao somenteuma planilhaestimativa de
renda com as explora,ces planejadas.Partindo-se da hip6tese que a produtividadeestimadae pre,os
se confirme, ainda assim nao se pode fazer tal afirma,co, uma vez que os custos de pagamento do
financiamentoda terra nao foram computados em nenhum dos casos.
3. Se o objetivo e a melhoria das condic,es de vida o minimoque deveria ser feito seria
computar os custos do financiarnentodo im6vel na mesma planilhapara verificara real capacidade
de pagamentodos "beneficiarios",bem como a sustentabilidadedo projeto.
4. Em rela,caoArenda das familiasafirma-se que pesquisa em andamentoatesta uma aumento
de 20 a 30% na renda.Mas nao sao apresentados dados due corroboremessa afirma,caoe nao e feita
nenhuma prospe,co sobre o impacto do pagamento das parcelas de financiamentosobre a renda.
Cabe ressaltar que as familiasainda estao no prazo de carencia,portanto, ainda nao estao pagando a
terra.
5. Dos 97 im6veisadquiridos,47 tem ate 500 ha, 32 de 500 a 1000 ha, 14 de 1000 a 2000
ha, e 04 acima de 2000 hectares. Mais da metade dos imoveis, portanto, estao acima dos 500
hectares. Ha, pelo menos, dois casos em que o mesmo proprietariovendeu mais de um im6vel ao
Cedula da Terra. A Sra. Maria Mirtes Pessoa vendeu dois im6veisno municipiode Acarau e outro
no municipiode Bela Cruz, totalizando 2.108 hectares. 0 mesmotecnicorealizou a vistoria nos tres
im6veis (anexo2).
6. Cabe destacar que dentre os im6veis adquiridos em Acarau, o Sitio Sao Felipe da Sra.
Mirtes recebeu o maior preco da terra nua classes [-III, R$ 300,00 o hectare, valor bem acima da
15.Os laudos tecnicos destas 9 areas foram realizados pelo mesmo tecnico, sendo que em
pelo menos 4 areas, o texto do laudo e identico.
D. ESTADO DE PERNAMBUCO
0 Programa Cedula da Terra adquiriu 28 propriedades ate mar,o de 1999 no Estado de
Pernambuco. Segundoo relat6rio, vinte e um (21) sao im6veisde tamanho "medio" e sete (7) sao
grandes areas, sendo uma (1) "propriedade improdutiva" (p. 2). Grande parte dessas areas foram
adquiridas no segundosemestrede 1998 e primeiro semestrede 1999(anexo 1).
Em primeirolugar, chama a atenc,o que os im6veis adquiridosno Estado tiverarn um preco
medio por hectare (R$ 359,02) muito superior aos demais estados. Por exemplo: RS 138,06
(38,45%) no Ceara, R$ 195,86(54,55%) em Minas Gerais e R$ 231,88 (64,58%) na Bahia.
Entre os im6veisadquiridos em Pernambuco, os laudos de avaliaqaode tres areas com mais
de mulhectares apresentamproblemas como, por exemplo, aquisi,co de areas improdutivas e pre,o
pago pelasterrasou benfeitorias.
Preposdas terras e benfeitorias
1. A Fazenda Vale da Boa Esperan9a, localizada no Municipio de Gravata, (anexo 2) foi
adquiridaem03 de junhode 1998por R$ 700.470,00.Essevalorrepresenta14,32%do total gasto
(R$ 4.890.210,08)na comprade todas as 28 fazendas.Os 1.134hectaresda fazendarepresentam
apenas8,32%da areatotal adquirida,assentando71 familias(9,95%).
2. Alem do pre,o total do im6vel, chama a atencao os valores pagos por algumas
benfeitorias.Umacasa de 187,7m2 foi or,ada em R$ 20.300,00.Outrasduascasas foramavaliadas
em R$ 18.600,00cadauma.
3. A compara,cocom benfeitoriasde outras areas adquiridaspermiteperceberque esses
valoressao elevados.Umacasade 208,37m2 , (maiore tambemde luxo),da FazendaCasa de Pedra,
por exemplo,foi compradapor RS 5.216,00.
4. Mesmo sendo constru,6es de luxo, a pergunta e: qual a utilidadedessas para um
assentamentocom 71 familias?Essas benfeitoriasacabaramaumentandoo preco final do imovel,
mas provavelmentenao serao utilizadas ou serao pouco utilizadas pelo conjunto das familias. 0
laudopermiteconcluirquea areafoi superestimadanos aspectosnaoprodutivosda mesma.
AquisiSaode areaspassiveisde desapropriasao
5. Algunslaudosde avaliaqaodemonstramque variasareasadquiridaspelo Cedulada Terra
eram passiveisde desapropriacaopor interesse social para fins de reforma aerdria. As areas
apresentavam,no melhordos casos,baixaprodutividade,mas pelomenosuma area era passivelde
desapropriar,ao.
6. A FazendaCasade Pedra,localizadano Municipiode Granito(anexo3), e o exemplomais
claro de uma propriedadeimprodutiva,portanto, passivelde desapropriac,opara reformaagraria.
De acordocom o laudode avaliac,o, I . 151,52hectareseramde area aproveitavelnao utilizada,ou
seja, 70,23%da areatotaldo im6vel(1.639,52hectares)era improdutiva.
7. A FazendaSerra do Inga/Prata,localizadano municipiode Exu, (anexo 4) e outro
media das demaisaquisi,ces (anexo 3).
Aquisi$io de areas passiveis de desapropriacao
7. Com rela,co a produtividade dos im6veis adquiridos o agente publico afirma "Entretanto,
vistorias de avaliac,o tecnica, anexas, realizadas pelo IDACE, revelam potencial agropecuArio e
atividade produtivanos referidosim6veis, incluindo-seaqueles acimade 500 ha, ainda que o Estado
tenha passado por dois anos de seca, nao sendo, portanto, passiveis de desapropria,ao,
comprovando o carater complementar e auxiliar do Programa Cedula da Terra, ao processo da
Reforma AgrAria."(p. 3 do documento resposta) (anexo 1).
8. Neste caso, a pressa em defender o Programa levou o agente publicoa afirmar inverdades
que se comprovam na analise dos laudos anexos a sua resposta fantasiosa.Em primeiro lugar, o
pr6prio MinisterioExtraordinario da Politica Fundiaria admite a possibilidadede compra de terras
passiveis de desapropria,co nas informac,es gerais, demonstrandoa inconsistenciado argumento do
carater supostamentecomplementare auxiliardo Cedula da Terra.
9. Em segundo lugar, os laudos nao permitem a afirmacaode que as propriedade nao eram
suscetiveis de desapropriacao. A analise dos laudos deixa claro que nao foram realizados os
procedimentospara avalia,co da produtividade dos im6veiscomo, por exemplo, a determlinacaodo
GUT (Grau de utilizacaoda Terra), etc. Sem estes dados a afirma,co do agente publico transformase em infundadae irresponsAvel.
10. Por fim, a analise de alguns laudos permite perceber indiciosfortes de foram adquiridos
im6veis passiveisde desapropriacao pelo nao cumprimento da fun,ao social. A Fazenda Esperan,a
II, no municipiode Paramnb, por exemplo, tem uma area total de 1.421hectares, dos quais 70% sao
solos das classes I-III, portanto, com bom potencial de explora,ao. 0 laudo atesta, no entanto, a
distribuic,o das areas do im6vel tinha 200 hectares de pastagens naturals(14% da Areatotal) e 932
hectares de Areaaproveitavelnao utilizada. A Fazenda tinha 65,58% de sua Areatotal completamente
improdutiva, caracterizandouma situac,o passivel de desapropria,ao para fins de reforma agraria.
(anexo 4)
11-Nao sou raros casos desta natureza, o mesmo acontece,por exemplo,com a propriedade
Condado, vendida pelo Sr. Jose de Carvalho Melo, localizada no municipiode Quixerarnobim.0
im6vel possui 2.065 hectares, sendo que 1.282 hectares eram de area aproveitAvelnao utilizada, ou
seja, 62,98% da propriedadeera improdutiva.(anexo 5)
Participacao e organizacao das familias beneficiArias
13. Quanto ao perfil das associa,6es, percebe-se que vAriasdelas foram constituidas para a
compra de terras. Isto fica claro em alguns laudos que afirmam categoricamente que: "A Associacao
Comunitaria nao demonstrou experiencia em trabalhos coletivos". como
ao caso dos im6veis
Arvoredo e Massape no municipio de QuixadA. Em vArios outros casos afirma-se que a comunidade
se encontra e "estagio inicial de organizacao".
Brasilia, 27 de agosto de 1999
NOS, ABAIXO ASSINADOS, SOLICITAMOS A
INSTALAQAODO PAINEL DE INSPEQAO DO BANCO
MUNDIAL PARA 0 PROJETO UREFORMAAGRARIA E
REDUgAO DA POBREZA NO BRASIL - CEDULA DA
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ANEXO XI
-
Laudo da Fazenda Porteiras de Baixo
ANEXO XI
-
Laudo da Fazenda Buri
ANEXO xm
-
Laudo da Fazenda Bela Vista
ANEXO XIV
- Laudo das FazendasBoa Vista e Baixa Grande
ANEXO XV
-
Laudo da Fazenda Alivio
ANEXO XVI
-
Laudo da Fazenda Santa Izabel
ANEXO XVI
- Laudo das FazendasMarajoara, Rio do Meio e Renovarao (Associa9ioNova Canaa)
ANEXO XVIm
Demonstrativosdos Sub-projetos de Aquisic,o de Terras (SAT) no Estado da Bahia
ANEXO XIX
-
Laudo da Fazenda Santa Monica
ANEXOS DO ESTADO DE MINAS GERAIS
ANEXOI
- Lista de propriedadesadquiridasno Estado
ANEXO U
-
Laudo tecnico da Fazenda Formosa
ANEXO m
-
Laudo tecnico da Fazenda Acary
ANEXOIV
-
Laudos da Fazenda Espirito Santo
ANEXO V
-
Laudo tecnico da Fazenda Maraba II
ANEXOS DO ESTADO DE MARANHAO
LISTA DOS DOCUMENTOS
ANEXOS GERAIS
ANEXO I
- Oficiodo Ministro Raul JungmannPinto encaminhandoos documentos
ANEXO H
- Documento geral do Ministerio Extraordinario de Politica Fundiaria respondendo is
quest6es do Requerimentode Informna9co
ANEXOS DO ESTADO DA BAHIA
ANEXO I
Laudo da Fazenda Linhares
ANEXO I
-
Laudo da Fazenda Nova
ANEXO m
- Laudo da FazendaCanta Galo
ANEXO IV
-
Laudo da Fazenda Jacobina
ANEXO V
-
Laudo da Fazenda Altamira da Direita - Associaco Timb6
ANEXO VI
-
Laudo da Fazenda Altamira da Direita - Associa,co Novo Paraiso
ANEXO VII
- Laudo da Fazenda Altamira da Direita - Associa,co de Lavradores de Altamira do
Conde
ANEXO VI
-
Laudo da Fazenda Reunidas Itariri - Associa,co Nova Lusitania
ANEXO IX
-
Laudo da Fazenda Reunidas Itariri - Associa,co Novo Horizonte
ANEXOX
-
Laudo da Fazenda Reunidas Itariri - Associac.o Ant6nio Conselheiro
ANEXO I
- Documento sobre a implanta,ao do Cedula da Terra no Estado do Maranhaoe lista das
areas adquiridas
ANEXOS DO ESTADO DE PERNAMBUCO
ANEXO I
- Resposta ao requerimentoe lista das propriedades adquiridas
ANEXO H
- Laudo de avalia,ao da Fazenda Vale da Boa Esperanca
ANEXO m
- Laudo de avalia,co da Fazenda Casa de Pedra
ANEXO IV
- Laudo de avalia9&oda Fazenda Sitio Serra do Inga e SitioPrata
ANEXOS DO ESTADO DO CEARA
ANEXO I
- Informa,ces sobre o Cedula da Terra (documento resposta) e lista das propriedades
adquiridasno Estado do Ceara
ANEXO II
- Laudo de avalia,co da Fazenda Lagoinha/Solidao
ANEXO m
- Laudo de avalia9Aoda Fazenda Sitio Sao Felipe
ANEXO IV
- Laudo de avaliagaoda Fazenda Esperan,a II
ANEXO V
-
Laudo de avaliarao da Fazenda Condado
ANEXO XI
-
Laudo da Fazenda Porteiras de Baixo
ANEXO XH
-
Laudo da Fazenda Buri
ANEXOxm
-
Laudo da Fazenda Bela Vista
ANEXO XIV
- Laudo das Fazendas Boa Vista e Baixa Grande
ANEXO XV
-
Laudo da Fazenda Alivio
ANEXO XVI
-
Laudo da Fazenda Santa Izabel
ANEXO XVH
- Laudo das FazendasMarajoara, Rio do Meio e Renova,ao (Associa9aoNova Canaa)
ANEXO XVmI
- Demonstrativosdos Sub-projetosde Aquisi,ao de Terras (SAT) no Estado da Bahia
ANEXO XIX
-
Laudo da Fazenda Santa Monica
ANEXOS DO ESTADO DE MINAS GERAIS
ANEXO I
- Lista de propriedades adquiridasno Estado
ANEXO I
-
Laudo tecnico da Fazenda Formosa
ANEXOm
-
Laudo tecnico da Fazenda Acary
ANEXO IV
-
Laudos da Fazenda Espirito Santo
ANEXO V
-
Laudo tecnico da Fazenda Maraba II
ANEXOS DO ESTADO DE MARANHAO
LISTA DOS DOCUMENTOS
ANEXOS GERAIS
ANEXO I
- Oficio do Ministro Raul JungmannPinto encaminhandoos documentos
ANEXO U
- Documento geral do Ministerio Extraordinario de Politica Fundiaria respondendo is
questoes do Requerimentode Informa,ao
ANEXOS DO ESTADO DA BAHIA
ANEXO I
-
Laudo da Fazenda Linhares
ANEXO I
-
Laudo da Fazenda Nova
ANEXOm
-
Laudo da Fazenda Canta Galo
ANEXOIV
-
Laudo da Fazenda Jacobina
ANEXO V
-
Laudo da Fazenda Altarnira da Direita - Associa,cao Timb6
ANEXO VI
-
Laudo da Fazenda Altamira da Direita - Associa,ao Novo Paraiso
ANEXO VU
Laudo da Fazenda Altamira da Direita - Associarco de Lavradores de Altamira do
Conde
ANEXO Vm
-
Laudo da Fazenda Reunidas Itariri - Associaqao Nova Lusitania
ANEXO IX
-
Laudo da Fazenda Reunidas Itariri - Associarlo Novo Horizonte
ANEXO X
-
Laudo da Fazenda Reunidas Itariri - Associacao Ant8nio Conselheiro
ANEXO I
Documento sobre a implanta,co do Cedula da Terra no Estado do Maranhaoe lista das
areas adquiridas
ANEXOS DO ESTADO DE PERNAMBUCO
ANEXO I
- Resposta ao requerimentoe lista das propriedadesadquiridas
ANEXO I
- Laudo de avalia9aoda Fazenda Vale da Boa Esperan9a
ANEXO m
- Laudo de avalia,co da Fazenda Casa de Pedra
ANEXO IV
Laudo de avaliacaoda Fazenda Sitio Serra do Inga e SitioPrata
ANEXOS DO ESTADO DO CEARA
ANEXO I
Informac,6essobre o Cedula da Terra (documento resposta) e lista das propriedades
adquiridasno Estado do Ceara
ANEXO I
Laudo de avalia,ao da Fazenda Lagoinha/Solidao
ANEXOm
-
Laudo de ava1ia9aoda Fazenda Sitio Sao Felipe
ANEXO IV
- Laudo de avalia,ao da Fazenda Esperan9aII
ANEXO V
-
Laudo de avalia,ao da Fazenda Condado
resettling families. Should it be successful, the Bank will support an land reform program on a
large scale." (Item 57 of the CAS). However,the request submitted by the Forum is based on
queries challenging not only decisionstaken by the Brazilian Governmentto set up one of
more "market land reformprojects",but also the decisions and strategiesadoptedby the
World Bank for Brazil.
Second, the affirmationby the OperationsAdministration Departmentof the Bank that the entities
in the National Land ReformForum that signed the request do not represent the interestsof the
persons affection is at the very least an attempt by the Bank to wield political clout overBrazilian
organizations in civil society.In addition to ignoring the rules of the Bank itself - which endow
any group or entity with the right to request inspection - this type of argumentshows a complete
lack of respect for the political history of entities and movements representingmillionsof workers,
particularly rural workers, farmersand farm families, as well as other segmentsof the populace
striving for survival in rural parts of Brazil.
On May 27 this year, the InspectionPanel submitted a report to the Board of Directorsof the
World Bank which, although acknowledginglegitimacy of the request and the broad-ranging
representativityof the signatoryentities, did not recommend that an investigationbe undertaken.
This decision was consideredby the representativesof the Brazilian Governmentand the Executive
Director for Brazil of the World Bank as a confirmation of the excellence of the Project.
Despite the thanks of the Panel Group for the comments and guidance of the Forum and those
requesting an inspection of the Project,during its visit to Brazil (Report and Recommendation,page
3, footnote, item 5), the contents of the reply suggested the conclusion of the Panel as based largely
on the comments and advice of Mr. Murilo Portugal. The reply also suggestedthe that the
information from civil servants workingfor State Governments and responsiblefor the
implementation of the Cedulada Terra Project, who were also thanked in the document,are
accepted to the detriment of the argumentsand documents presented by those requestingthe
inspection.
As publicly known, since the start of the process in question, the Executive Directorfor Brazil has
been systematicallytaking up a conservativestance against the Request for Inspection.He has urged
the implementation and expansionof the financing project for the purchase of land, despite
irregularities and the negativeimpacts of such implementation.
According to the President of Brazil, Mr. Fernando Henrique Cardoso, at a public hearingwith
Forum leaders on July 8, 1999, Mr. Murilo Portugal, the Brazilian representativeto the Bank was
instructed to vehementlyoppose the establishment of the Panel. Accordingto the Presidentof
Brazil, this decision is based not on technical assumptions but rather on the fact that the Brazilian
Govemment does not allowWorld Bank intervention in national policy.
The Forum understands that under such circumstances,the World Bank would run counterto its
own Rules regarding the ban on political activity established in its Articles of Incorporation.
According to this Rule "the Bank and its employees may not intervene in the political issues of any
member, nor should they be influenced in their decisions by the political character of the member or
members involved. Only economic considerations should be relevant in their decisions, and these
considerations should be weighed impartially, in order to achieve the purposes stipulated in Article
1". (IBRD, Articles of Incorporation,Art. IV, Section 10).
In view of this, the expectationsof the Forum were that both the Brazilian ExecutiveDirectorand
the Inspection Panel as the representativeof the IBRD would be subject to the Rules in the Articles
of Incorporation, immune from all political influence of the member Government.The Panelwould
thus fulfill the key purpose of being an independententity to which communitiesadverselyaffected
by World Bank projects could have turn, ensuring that it acts in accordance with its own policies
and procedures.
However, on May 6, 1999,documentscovering the implementation process of the Cedulada Terra
NATIONAL FORUM FOR LAND REFORM
AND RURAL JUSTICE
Brasilia/FederalDistrict August 27, 1999
The
Chairman, World Bank, Mr. James Wolfensohn;
Board of Executive Directors,World Bank and,
Chairman, Inspection Panel, Mr. Jim MacNeil
WASHINGTON,D.C.
UNITED STATES OF AMERICA
Dear Sirs,
On December 10, 1998, the National Forum for Land Reform and Rural Justice (F6rumNacional
pela Reforma Agraria e pela Justi,a no Campo) forwarded to the Inspection Panel at the World
Bank a Request for Inspectionof the Land Reform and Poverty AlleviationPilot Project (Project
N°. 4147-BR), commonly known as the Cedula da Terra Project.
Among other arguments,this Request for Inspection was based on the fact that this Project was
failing to achieve its objective of combatingpoverty; it is not being implementedas a pilot project
but rather as an alternativeand not a supplementto land expropriation furtheringsocialinterests for
the purposes of land reform.
The Forum claimed that the financingconditions did not allow its beneficiaries to pay the debt
contracted when joining the Project. It was also argued that the implementationprocessopenly
breaches the World Bank Project Standardsby not allowing the participationof the beneficiary
populace and its representatives.
Through the Operations AdministrationDepartment, the World Bank presentedits reply to the
Inspection Panel on March 8 this year. To the surprise of the Forum, based on a theoretical
assumption that the Project "was very well designed" and as a Pilot Project "was presenting good
results", the OperationsAdministrationDepartment of the bank did not merely replyto the queries
in technical terms. In fact, it attemptedto undermine the political legitimacy of the NationalForum
for Land Reform and Rural Justice, stating that 1) the Request for Inspectionwas based on
"philosophicalarguments"and 2) the signatories of the request were not the legitimate
representativesof the person and groups affected by the Cddula da Terra Project.
Initially, the Request for Inspectionforwarded by the Forum was based on argumentsthat were
sufficiently valid to demonstratethe serious problems undermining the success of this Project,
rather than philosophical objectionsof any type whatsoever. Additionally,the statementby
Operations AdministrationDepartnent of the Bank claimed that the choice of a "marketland
reform" policy is restricted to a "...Government policy option" rather than the "...appropriate
implementation by the Bank of its own policies and procedures" (page 2, item 6 of the reply
forwarded by the Panel to the Forum). This statement from the Operations Administration
Department openly contradicts the decisions and responsibilitiesof the World Bank regarding
the policy adopted for Brazil.
According to the Country AssistanceStrategy (CAS), Report N0 . 16582-BR,datedJune 12, 1997,in
its chapter on "The Role of the World Bank Group: Social Development", it states "The Bank will
also consider fresh assistance with regard to land reform, launching a pilot project. This will test a
model with a higher cost/benefit ratio that is easy to implement and slanted towards the market for
National Forum for Land Reform and Rural Justice
National Landless Peasants Movement
(MST -Movimento Nacional dos TrabalhadoresRurais Sem Terra)
National Confederationof Peasant Workers in Agriculture
(CONTAG - Confedera,do Nacional de TrabalhadoresRurais na Agricultura)
Pastoral Land Commission
(CPT
-
Comissao Pastoral da Terra)
National Conference of Bishops/Brazil
(CNBB - ConferenciaNacional dos Bispos do Brasil)
Indigenous Peoples' Council / Brazil
(CAPOIB - Conselhode Povos Indigenas do Brasil)
National Rubber-TappersCouncil
(CNS - ConselhoNacional dos Seringueiros)
National Confederationof Workers / INCRA
(CNASI - Confedera(cdoNacional dos Servidores do INCRA)
National Network of Rural Women Workers
(ANMTR - Articula,do Nacional de Mulheres TrabalhadorasRurais)
Brazilian Land Reform Association
(ABRA - Associa,do Brasileirade Reforma Agrdria)
Socio-EconomicStudies Institute
(INESC - Instituto de Estudos Socioecon6micos)
Indigenist MissionaryCouncil
(CM - ConselhoIndigenistaMissiondrio)
Land Reform Unit / Workers Party
(PT - Secretaria de ReformaAgrdria, Partido dos Trabalhadores)
Caritas / Brazil
National Council of Christian Churches
(CONIC - Conselho Nacional de Igrejas Cristds)
National Human Rights Movement
(MNDH - MovimentoNacional dos Direitos Humanos)
Trade Union Training and AdvisoryInstitute
(IFAS - Instituto de Fonna,do e Assessoria Sindical)
Rural Services and Studies Department
(DESER - Departamentode Estudos e Servi,os Rurais)
Federation of Social Securityand EducationEntities
(FASE - Federa,do de (5rgdospara a Assiste^nciaSocial e Educacional)
Brazilian Institute for Social and Economic Analysis
(IBASE - Instituto Brasileiro de An-4lisesSocioecon6micas)
Workers Trade Union Confederation
(CUT - Confedera,do (nica dos Trabalhadores)
Alternative Projects AdvisoryUnit
(ASPTA - Assessoria de ProjetosAlternativos)
National Movement for those Adversely Affected by Dams
(MAB - Movimento Nacional de Atingidos por Barragens)
Ecumenical Services CoordinationUnit
(CESE - Coordenadoriade Servi,os Ecume^nicos)
National Federal Civil Servants Council
Project in five States were forwardedto the offices of Senator Heloisa Helenaand Federal
Congressman Valdir Ganzer.This procedure was in response to the Requestfor Information
forwarded by these Members of Parliament to the Minister Extraordinaryfor Land-Ownership
Policy, Raul Jungmann, on March 2, 1999. It is important to stress that these documentswere not
submitted by the Govemment to the Inspection Panel and nor were they taken under consideration
in the World Bank reply.
As was to be expected, these documentsproved the claims of the Forum regardingthe problemsof
the Ce'dulada Terra Project, and also clearly outlined marked indicationsof corruption,overevaluation and favoritism in the process of implementing the Cedula da Terra Project. These
documents also clearly highlighteddiscrepanciesbetween the statementsmade by the WorldBank
and the Brazilian Govemment regardingthe implementation of this Project. For instance, although
the Operations AdministrationDepartmentof the Bank stated that non-productiveland is not
included in the purchasenegotiationsof this Project, the implementation processplacesno
constraints on this aspect, and in fact, various areas open for expropriationhavebeen acquired.
In addition to the queries mentionedabove regarding the non-participationof organizedcivil society
in the process of implementationof the Cedula da Terra Project and its lack of economicfeasibility,
the documents presentedby the ExtraordinaryMinister for Land-OwnershipPolicyoffer strong
indications of favoritism and corruptionduring the implementation of this Project in various States.
This fresh information - which was obtained from official documents - proves the pertinenceof
the arguments submittedpreviously. The National Forum for Land Reformand Rural Justice is
thus forwarding a fresh Requestfor Inspection to the Panel of the World Bank. We believe
that this fresh Request for Inspectionoffers an opportunity to assess the seriousproblemsnoted,
while also providing the IBRD with a chance to review the errors in its originalstance, which are
certainly not in keeping with the standards or austerity and probity of this institution.
It is necessary to state that the Forum for Land Reform and Rural Justice is not refusingany help to
the thousands of families of workersand rural workers struggling for land reform.Organizationsin
civil society that are members of the Forum acknowledge the importance of the WorldBank in view
of the imbalances causedby the Brazilianeconomic system. However, resourcesearmarkedfor the
Land Bank Program should be assignedto agricultural credits for settler families,creatingfunding
that assures the feasibility of their long-term settlement on the land, generatingjobs and income in
rural areas.
According to IBRD ResolutionN°. 93-10/AID93-06 (which establishes the criteria for the
functioning of the InspectionPanel), the Panel Group is authorizedto acceptRequestsfor
Inspection covering specific matterson which it has already issued its recommendations.This
resolution states that a fresh requestis justified by the appearance of new evidenceor circumstances
unknown at the time of the originalRequest (Paragraph 14D). The Forum feelsthat the documents
present new evidence which reflects distortions in the purpose of the Cedulada Terra Project,
endowing this request with technicaleligibility.
In view of this, and as new facts have become known, all from official sourcesand including the
attached document, we once againrequest that an Inspection Panel be establishedfor the Project
under consideration based on the World Bank Resolution that establishedthis Panel.
We would also like to advise the Directorsthat the Forum is forwarding a requestto the Brazilian
Ministry of Justice for an investigativeprocedure analyzing the irregularitieslisted above.
Yours faithfully,
D. Tomas Balduino
Executive Secretary
(CONDSEF - ConselhoNacionaldos Servidores Federais)
Amazon Working Group
(GTA - Grupo de Trabalho Amazonico)
Brazil Network - Multilateral Financial Institutions-
(Rede Brasil sobre Institui,ces FinanceirasMultilaterais)
Movement for the Freedomof LandlessPeasants
(MIST - Movimentopela Liberta,do dos Sem Terras)
Rural Youth Pastoral
(PJR
-
Pastoral da Juventude Rural)
Brazilian Studies Institute (IBRADES - Instituto Brasileirode Estudos)
Networking Process and DialoguebetweenEcumenical Agencies and their Partners in Brazil
(PAD - Processo de Articula,do e Didlogo entre Agencias Ecumenicase seus Parceirosno
Brasil)
SIGNATURES: LEADERSAND WELL-KNOWNNAMES REPRESENTINGBRAZILIAN
SOCIETY.
THE WORLD BANKIIFC/IM.I.G.A.
OFFICE MEMORANDUM
DATE:
TO:
FROM:
EXTENSION:
SUBJECT:
RECIi--b
November 15, 1999
James W. MacNeill, Chairman, The Inspection Panel
99
NOV
15 PM
3:09
TilE IsNSpPCTIOi4
PANEL
James D. Wolfensohn,President, EXC
81138
BRAZIL: Land Reform and Poverty Alleviation Pilot Project (Loan 4147-BR)
ManagementResponse to Second Request for Inspection
1.
On September28, 1999, the Inspection Panel registered a Requestfor Inspection
concerningthe above-referencedproject. The ManagementResponseaddresses all issues
raised in the Requestand the claims of non-compliance with Bank policies and
procedures. We regret the delay in submitting this Responsedue to misunderstandingsof
internal procedureswithin Management;we are putting in place correctivemeasures in
order to avoidthis happening again.
2.
Managementbelieves that the Brazil Land Reform and Poverty AlleviationPilot
Project is a very well designedoperation, and that the Bank has compliedwith all of its
policies and proceduresin respect of this Project. As a pilot, the Project is being closely
supervised,studied and fine-tuned. The Project is already yielding significantresults on
the ground for a largenumber of poor rural families in the Northeastof Brazil, and shows
excitingpromiseas a cost-effective,expeditious and non-conflictivemeans of achieving
a redistributionof land assets.
3.
Managementfurther believes that the Requesters do not demonstratereal or
potential harm to any Project beneficiaries. The informationpresentedin the Request
does not constitutenew evidence nor does it change the conclusionsreached in the First
ManagementResponse. Bank Managementhas an open policy with NGOs and would
have liked the opportunityto review with the Requestersthe improvementsalready
introduced,as well as to have been able to review with them the claims presented in the
Second Request beforetheir appeal to the Inspection Panel. Differencesin the
interpretationor analysis of the same basic information couldhave been clarifiedhad
those discussionstaken place. However, the Requesters have not accepted any of the
Bank's repeatedinvitationsto have a discussion on these issues.
Attachment: ManagementResponse to the Inspection Panel
Distribution:
Messrs./Mmes. Sandstrom (MDC); Hassan, Khairallah(LEGVP); Johnson (ESDVP),
DeFerranti, Ody (LCRVP); McCalla (RDV);Ecevit (LCODR);
Nankani, von Amsberg (LCC5F); Redwood,Coirolo,Roumani
(LCSES); Molnar (LEGLA);Ninio (LEGEN);T. Barbosa, J. Barbosa
(LCSRE)
AbbreviationsUsed in this Document
BdaT
-
BP
CdaT
-
CMU
-
Banco da Terra
(Land Fund for AgrarianReform)
CONTAG
Best Practice
Cedula da Terra
(Land Reform and Poverty AlleviationPilot Project)
Country Management Unit
National Confederationsof Rural Workers
CSO
FETAG
INCRA
LAC
-
Civil Society Organization
Federation of Rural Workers
Federal Land Reform Agency
Latin America and Caribbean
NEAD
-
Nucleus of AgriculturalStudies and Development
NGO
OD
POA
-
Non-Govermmental Organization
Operational Directive
Annual Operating Plan
PROCERA
PRONAF
-
Credit Program for Land ReformBeneficiaries
National Program to StrengthenFamily Agriculture
QAG
R$
TJLP
TA
TU
-
Quality Assurance Group
Brazilian Real (unit of currency)
Long Term Interest Rate
Technical Assistance
Technical Unit
2
MANAGEMENT RESPONSE TO
SECOND REQUEST FOR INSPECTION PANEL REVIEW OF
BRAZIL: LAND REFORM AND POVERTY ALLEVIATION PILOT PROJECT
LOAN 4147-BR
Managementhas reviewed the Second Request for Inspectionof the Brazil Land
Reform and Poverty Alleviation Pilot Project registered on September28, 1999. The
followingresponsehas been prepared by Management.
Contents
Chapter
I
Introduction .........................................................
lI
Response to Claims of Adverse Impact of the Project ...................
In
Conclusions........................................................
ANNEX A:
ANNEX B:
ANNEX C:
ANNEX D:
ANNEX E:
Information on Properties Listed by Second Request
Project Supervision and Improvements Introduced
Efforts to Communicate with the Requesters
Letter from Minister of Agrarian Reform on
Land Purchase and Other Credit
Management Response to First Request for Inspection
3
3
10
2.2
The claimsregistered by the Panel include:
1.
2.
3.
4.
Theterms of the loans for land purchases have not been improved;
There is a lack of adequate lines of credit to supportproject beneficiaries;
The project pays inflated prices for land that could be expropriatedat a lower
cost; and
The quality of the land purchased is poor.
Managementis responding to the four principal claims listed above,and to two additional
claims: the first related to land evaluationprocessing (paras. 2.12 and 2.13 below), which
accordingto the Requestersmay have affected the price and quality of lands acquired under
the Project; and the second, that CdaT has in the past financedthe purchaseof properties
eligible for expropriationand that this fact was withheld from the InspectionPanel (para.
2.16). As a pilot, the Project has been closely supervised,and lessonshave been learned and
incorporated(para.2.17and Annex B).
2.3 ClaimNo 1: The terms of the loans for land purchaseshave not been improved.
The Requestersclaimthat the conditions of the loans for land purchaseshave not been
improved3 as indicatedby the Panel (INSP/R 99-4, para. 22) and that, as a consequence,the
beneficiarieswould not be able to repay their loans. The BrazilianGovernmentthrough the
Minister of AgrarianReform, indicated to the Panel and to the Bank, and this was in turn
reflected in the first ManagementResponse (paragraphs 4.9 and 4.10),that the loan
conditions for the Bancoda Terra (BdaT) would be extendedto the beneficiaries of the CdaT
project, and that the retroactive adjustments to loan terms would be made before the first
repayments of any Project beneficiaries fall due in 2001. The Ministerhas also conveyed
this decisionto the participant states and these in turn have informedthe beneficiaries.
2.4 In a recent correspondencefrom the Minister of AgrarianReformto the Bank's
Country Directorfor Brazil (Annex D), informiingthe Bank aboutthe release of funds for
land purchasesand for productive investments (to complete the project and to benefit some
10,000 additionalfamilies with the CdaT), the Minister indicatesthat all these land loans are
provided with BdaT funds under the terms approved for this program(para. 2.5 below). In
addition, the Ministerreiteratesthat land loans made previouslyunder the CdaT project
would be retroactivelyadjusted to the BdaT conditions.
2.5 As indicatedby the Requesters,the loan conditions approvedfor the BdaT project are
variable accordingto loan size. Since all loans of CdaT beneficiariesare less than R$15,000
per family, the applicable loan conditions include a 20-yearrepaymentperiod with three
years of grace, and an interest rate of 4% (as stated in the first ManagementResponse para.
4. 10, and explainedto the InspectionPanel). In addition, the rules of BdaT determinethat, in
the poorest areas,beneficiaries would receive a discount of 50% of the nominal interest rate
and are thus in an evenbetter position than assumed in the first ManagementResponse.
From the original CdaTterms with loans for 10 years, including a three-year grace period and an interest rate
based on the average cost of long-term borrowing (TJLP), to the more favorableterms of a new program
(ComplementaryLaw 93) known as Banco da Terra with loan terms includinga 20 year repayment period,
three years of grace and a fixed real interest rate of 4%.
3
4
Chapter I: Introduction
1.1 This documentis Management's Response to the Second Requestdated August 27,
1999 for Inspectionof the Brazil Land Reform and Poverty Alleviation Pilot Project, -known as Cedulada Terra (CdaT) -- presented by the National Forumfor Agrarian Reform
and Justice in Rural Areas (known as the "Forum" and referredto in this Response as the
"Requesters"). The Second Request was submitted after the InspectionPanel, responding to
the First Request,conmmunicated
to the Board on May 27, 1999that "the Panel does not
recommend an investigationof the matters alleged in the Request."
1.2
As the Panel indicates in its Notice of Registration,the SecondRequestcontains
substantiallythe same allegationsas the original Request. On the basis of what the
Requestersdescribe as new informationfrom a sub-set of 39 properties2 (already acquired
and occupied prior to the first Request), the Requesters reiterateclaims relating to credit (for
the purchase of land, and other lines of credit for on-farm investmentsand other purposes)
and issues relating to the price of purchased land and its quality,when comparedto the
expropriationalternativepracticed by the Government. Due to the similarityof the claims
between the two Requests, Managementis attaching the original ManagementResponse for
reference about project backgroundand detailed responses regarding Bank compliance
with Bank Policies and Procedures,and has concentrated this Responseon the analysis of the
claims relatingto the properties listed in the Second Request.
ChapterII: Response to the Claims of Adverse Impactsof the Project
2.1 The Requestdoes not refer to violations of specific Bank policies and procedures,but
makes a number of general claims of adverse impacts of the project. The Requestersalso
claim that what they define as new information was not presentedby Governmentto the
Panel and was not consideredin the first ManagementResponse. The Notice of Registration
points to four substantiveclaims, and to OD 4.15 on Poverty Reduction,OD 13.05 on Project
Supervision and BP 17.50,on Disclosure of OperationalInformation,that could have been
violated if the Requesters' allegations were correct. We vish to make clear at the outset, (as
we did in our original Response)that we disagree that any adverse impactshave occurred or
that any Bank policies or procedureshave been violated. The informationpresented is
substantiallythe sameused for the preparation of the First ManagementResponse and does
not represent new evidencein light of the previous Request. The informationwas examined
in detail by Bank staff in the field, and does not change the conclusionsreached in the First
ManagementResponse. Managementcontinues to believe that the claims are not
substantiated.
The Land Reform and Poverty Alleviation Pilot Project is financed in part by Loan 4147-BR for US$90
million. It was approvedby the Bank's Board on April 22, 1997 and became effectiveon September 12, 1997.
The Project is part of the Bank's Rural DevelopmentCompact and was rated by the QualityAssurance Group
(QAG) as one of the two best-practiceoperations in the Latin America and the CaribbeanRegion in 1997, in
terms of quality at entry.
2 The Requestersalso point to two other properties where they claim beneficiarieshave organizational issues.
These projectaspects were covered in the first Response.
2.9 Claim No 3: The project pays inflated prices for land that could be expropriated
at a lower cost. The Requestersrefer to specific properties purchasedunder the project as
examples of the high prices paid by project beneficiaries as a result of the project. The
informationon land purchase prices submitted with the Second Requestis based on the same
data base and is consistentwith the analysis in the first ManagementResponse,which shows
that, in aggregate,landprices for the properties acquired under the Project have been
significantlylower than the present-valueequivalent paid for expropriatedproperties.6 As
stated in para. 4.33 of the first ManagementResponse, land pricespaid by the Project are
about 27% lower than the present value of initial INCRA expropriationprices in the
Northeast.7 This difference is greatly multiplied when the costs of judicial rulings in
expropriationcases are added. Accordingto a recent Ministry of AgrarianReform official
document: "The cost of the land obtained for agrarian reform is basicallydeterminedby the
judicial system that adjudicates approximately50% of all expropriations."According to this
same document,in a wide sample of analyzed cases, multiplicationfactors resulting from
judicial rulings ranged from 1.20 in the South to 14.64in the Southeastwith 4.93 for the
Northeast and 5.01 for Brazil as a whole.8
2.10 Within the aggregatefinding of lower land prices under the Project, there are notable
differences from state to state, with respect to both the level of land prices and the difference
between land prices obtained under the project and compensationpaid by INCRA for
expropriation. Specifically,land prices obtained in Pemnambucoare the highest among the
five project statesdue to more favorable climatic conditions in the Zona da Mata and Agreste
Regions of the state. While land prices are higher in Pernambuco,the relative cost advantage
of the Project comparedto expropriationis also higher (59% lowerprices per hectare
comparedto 27% for all states). In the case of Maranhao,the informationpresented by the
Requesterswas based on erroneous information providedby the State which included data on
properties whose purchasewas subsequentlyrejected, precisely because of excessive prices.
The comparativeinformationon INCRA expropriationexcluded the compensationpaid for
land improvementsand therefore underestimated the actual price INCRA paid.
2.11 Within states,agro-climaticand market conditions differ considerablybetween microregions, municipalitiesand areas within municipalities,thus affectingland prices. Price
differences within an area do not necessarily constitute irregularitiesand can often be
explainedby differencesin location, soil, access to water and other factors. Thirty three of
the 39 propertiesmentionedby the Requesters,and all the propertieswhere the Second
Request suggestsanomaliesin the purchaseprice, have been visited by Bank staff. In most
6 Since the data for the first ManagementResponse were prepared at a slightlydifferent time than the data
presented in the Second Request (Annex 11,Table 2.2), there are marginal differencesin individual figures with
respect to the properties included.With respect to average land costs per family, the informationpresented in
the Second Request shows slightly lower costs of land under the Project than the data shown in the first
Response.
7A more recent study (Raydon and Plata 1999) compared land prices at the state, micro-regionand municipal
level and shows that prices obtained underthe Project have also been consistentlylowerthan the prices of
market transactions, as recorded by Bank of the Northeast and FundacaoGetulio Vargas.
s For a subsampleof 46 properties cited in the same report published at end-September1999, and for which data
on landholdingin hectareswas available, the average price per hectare beforejudicial action was about R$424
(current value) comparedto a post-judicial action price of R$5,573 per hectare, more than a ten-fold increase.
A majority of landownerscontesting INCRAprices achieve significantprice increasesthroughjudicial rulings.
6
2.6 In analyzingproject beneficiary ability to repay their land purchaseloans, the
Requesterspresentedfinancial projections with assumptions which lead to results
substantiallydifferent from projections presented by the Bank. In particular,the projections
presentedby the Requesters assume a loan amount of R$15,000,even though the average
actual loan amountof the Project has been R$4,847,the figurewhich underlies Bank
projections. Under the revised loan conditions, annual per family installmentsfor the
average loan will range from R$200-570 in real terms. Previousstudies (see Box 1 of
previous ManagementResponse) and more recent field visits confirmthat beneficiaries will
be able to make repayments and substantiallyincrease their faznilyincomes. As a reference,
cultivationof one hectare with beans is typically sufficient to generatethe income for the
loan installments. The average family plot acquired under the project is about 27 hectares,
and many beneficiariescultivate at least some area with higher value crops. While the failure
of an individualsubproject as a result of the culmination of unfavorablecircumstances
cannot be categoricallyexcluded in a project of this scale, ongoingevaluationsand frequent
field visits have not revealed any such case.
2.7 Claim No 2: There is a lack of adeguate lines of credit to supportproject
beneficiaries. The Requesters claim that the lack of adequate lines of credit for project
beneficiarieswill not allow them to cultivate the land and repay their loans. In the original
Request,the Requestersclaimed that Project beneficiaries would not be able to finance their
start-upproductive activities through PROCERA (a special credit line for land reform
establishedin June 1986 to complement the National Agrarian ReformProgram of October
10, 1985). This is not the case. CdaT beneficiaries became eligiblefor PROCERA credit
through INCRA Portaria 567 of November 20, 1998. In the interimbetween the two
Requests, the Governmenthas substituted PROCERAwith anothercredit line, the National
Program to StrengthenFamily Agriculture (PRONAF). This changeequally affects
beneficiariesof the Project and beneficiaries of the traditional land reform program. The
beneficiariesof CdaT have been specifically included as beneficiariesof this special credit
line and are in the process of receiving this credit in the samemanner as beneficiaries of
Governmentexpropriationprograms. In the Minister's letter referred to in Annex D, he
states that, as establishedin the Operational Manual of PRONAF,CdaT beneficiariesqualify
to receive credit for working capital and investments from this program under the same
conditionsas other land reform beneficiaries.4
2.8 Project beneficiariesdo receive community investmentsand start-upgrants, and
therefore have support during the installation period.5 While accessto credit beyond this
initial periodis important,and the Project financialprojections do indeed assume some credit
access, the PRONAFprogram provides such credit. The heavily subsidizedterms of the now
extinct PROCERAwere not essential for financial viability.
4 It
should be noted that there is an overall scarcity of credit in Brazil. As a result, there is a high demand for
credit by land reform beneficiaries, and not all of this demand, whether from beneficiariesof CdaT or rNCRA
expropriation,can be satisfied.
5 This year's fiscal control measures caused delays in the release of funds for community investments and startup grants. The problem is now resolved (see Annex D).
5
unfavorable agro-climaticconditions and restrictions in terms of sustainableland use. The
Project is targetedat the poorest families. It therefore also operatesin unfavorableareas
affected by periodic droughtand water scarcity. The predominantproductionsystems in the
semi-arid areas are adjustedto the restrictions of this zone and include large areas for the
grazing of livestockplus smaller areas of subsistence and some highervalue market crops.
Under these conditions,it is expected that many properties would include areas with use
restrictions. The Project was designed such that all economicactivitiesof a community
taken together, includinglivestock, subsistence and market crops,provide sufficient
conditions for generatingthe income necessary to repay contracteddebt and substantially
increase the income and quality of life of the beneficiaries. All analysisand evaluation to
date suggest that the Project is succeeding in this respect, often creatingthe prospect of
multiplying pre-projectincome, already accounting for land loan repayment.
2.16 A related issue raised in the Second Request is that CdaT has in the past financed the
purchase of propertieseligible for expropriation. It is allegedthat this fact was withheld
from the InspectionPanel. This allegation is not correct. The ManagementResponse (as
well as the material from the Federal Government submitted with the SecondRequest) states
that the large majorityof the properties acquired under the Project couldnot have been
legally expropriatedbecausethey do not reach the minimum size requiredfor expropriation
(see first ManagementResponse,para. 4.31) or were productiveproperties. The original
design of the project did not exclude the possibility of purchasinglands that could be
expropriated. Subsequentlyhowever, at the beginning of this year, it was agreed that no
purchasing processwould be initiated for any property that could be potentially expropriated.
This has been compliedwith. In addition, the Annual OperatingPlans (POA)for the
remainder of 1999(that would benefit some 10,000 additionalfamilies),specificallyexclude
any expropriablepropertyfrom the Program.9
2.17 The implementationof the pilot Project has been a period of learningduring which
important lessonshave been learned through intensive supervision,internationaland national
seminars, studies and workshops,and incorporated in the Project. This approach is an
integral part of the Project design. The Projeci is part of the Bank's Compactfor Rural
Development and has receivedmore than the average supervisionsupport. Some 82
staffweeks were used in Project supervision over a 27-month periodwith more than 70% of
supervision time providedby staff of the Bank's Brasilia and Recife Offices.(For more
details on supervisioncoverage and improvements introduced in the Project, see Annex B).
2.18 Finally, as is oftenthe case, it is the voices of the beneficiariesthemselveswhich best
express how they feel aboutthe prices paid and quality of the land they bought as well as
their sense of the benefits of the Project and its impact on their lives. Examplesof those
voices follow in Box 1.
9Specific exceptionscould be considered only after review and approval by boththe StateCouncils, on which
civil society organizationsare represented, and the Office of the Ministerof AgrarianReform.
8
of the project sites visited, prices were not only lower than the average of observed market
prices, but also lower than those prices suggested by INCRA as indicativefor those specific
municipalities. In the few cases where small price differences were observed,specific
conditions provide a satisfactoryexplanation for the price differencesobserved in land
purchase documentation(see Annex A). In most properties visited, Projectbeneficiaries had
considered alternativeproperties before deciding to purchase the one they now own. In
addition, most of them declarenow that they would not be prepared to sell their land at all,
and most certainly not for the price they originally paid.
2.12 A relatedpoint raised by the Requesters refers to the land purchaseprice evaluation
forms (laudos). The Requesters claim that the laudos related to the propertieslisted indicate
problems with the evaluation system on prices and quality of the land and that furthermore,
many of them were not signed. The laudos are prepared by the state Project Technical Unit
to assist the communitiesin the negotiation process for purchase of the property- providing
information on location,natural resources and improvements- and to support state review of
the negotiated purchaseprice. Even though the laudo is describedin the Operational
Manual, it has no formal legal role in the land acquisitionprocess, which is based on the
negotiation of that land between the buyer and the seller. In practice,only rarely does the
evaluation of the laudo coincide with the actual purchase price which, in the majority of
cases, is lower than the price stated in the laudo. It should be clarifiedthat the laudo is only
mandatory in the case of expropriationfor public use, or for socialinterests for purposes of
agrarian reform, since it deals with a unilateral action by the Government,and is usually
challengedin thejudicial system. In the case of CdaT, the negotiationis open and a deal is
only consummatedwhen the two parties come to an agreementon price.
2.13 Unfortunately,in some of the documentation transmittedto the Requesters,the original
signed laudo was not included, but Bank staff verified in the field that all the documentation
for completedland purchases (with the Bank of the Northeast)includesthe signed laudos. In
the case of Minas Gerais, where the Requesters imply irregularitiesdue to the existence of
two laudos per property,the State has, in fact, adopted an additionalprocessing step. The
first laudo (laudo de avaliacao) is produced to guide beneficiariesin the purchase of the land,
and the second, a technical laudo (laudo tecnico), is produced after the beneficiariesare on
their land, for the purposes of orienting productive activities.
2.14 Claim No. 4: The quality of the land purchased is poor. The Requestersrepeat a
claim from the original Request, that most land purchasedby rural workersand subsistence
farmers under the Project is of poor quality. In fact, the evidencestrongly suggests that
lands acquiredunder the Project are generally of good quality. In specific cases of properties
listed as new evidenceby the Requesters and visited by Bank staff, this is also the case, and
examples of the productive capacity of these properties are includedin AnnexA. The
Requesters claimthat the Project is purchasing "unproductive"land. As a point of
clarification,the concept of "unproductive" implies under-utilizedlands (as defined in Brazil
for properties that could be subject to expropriation),not lands that have no productive
potential.
2.15 Many communityassociationshave acquired lands in the most favorable areas of the
project states and show excellent economic prospects. It needs to be recognized,however,
that this Project operates in the poorest region of Brazil, which includesmany areas of
Chapter III: Conclusions
3.1 Managementconsiders that the Brazil Land Reform and Poverty AlleviationPilot
Project is alreadyyielding significant results on the ground for a large number of poor
rural familiesin the Northeast of Brazil, and shows excitingpromise as a cost-effective,
expeditiousand non-conflictivemeans of helping to achieve a redistributionof land
assets. It has not and would not replace alternative approachesto land reform such as
expropriation,and specific rules have been introduced in the 1999 Annual Operating
Plans to ensure that properties that could be expropriatedare not part of the Project. New
loan conditionsfor landpurchases have been introduced to ensure that even farmers
located in the more difficultagro-climatic conditions of the semi-aridzones could repay
their loans.
3.2 The Requestersdo not demonstrateactual or potential harm to Projectbeneficiaries.
They do not demonstrateviolations of the Bank's policies and procedures. The new
informationpresenteddoes not represent new evidence in light of the previous Request
and does not changethe conclusionsreached in the first ManagementResponsein
relationto the claims registered for the Second Request by the InspectionPanel. As a
pilot project, severalimprovementshave already been introduced on the basis of close
and regular supervisionand ongoing evaluations. Bank Managementhas an open policy
with NGOs and would have liked to have the opportunity to reviewwith the Requesters
the improvementsalready introduced, as well as to have been ableto reviewwith them
the claims presentedin the Second Request before their appeal to the InspectionPanel.
Differencesin the interpretationor analysis of the same basic infornation could have
been clarified had those discussions taken place. However, the Requestershave not
accepted any of the Bank's many invitations to have a discussionon these issues (see
Annex C).
3.3 Managementand staff continue to make use of all opportunitiesto discuss the
Projectwith local farmers' organizations,beneficiary communitiesand with individuals
related to organizationsthat are part of the Requesters (see Annex C). Therefore,
Managementand staff continue to be optimistic that a fruitful dialoguewith the national
organizationsthat are part of the Requesters' Forum, can be developedin the near future.
We remain open for dialogue, open-minded on the substanceand ready to take valid
suggestionsand concernson board. Management believes that the participationof the
nationalorganizationsrepresented in the Requesters' Forum will enhance the
transparencyand the already importantbenefits brought about by the participationof
communityorganizationsand local entities in the Project.
10
Box 1: Voicesof the Project Beneficiaries from Properties Cited by the Requesters
"Whoeversays that this land is poqr has never visited the property! It is good for everything:basic grains,
fruits, livestock. For us, this purchase was a godsend. If we wantedto sell right now, I'm certain we
could get a higher price than what we paid. But, we don't think about selling."
- Sr. Guilherme Ferreira Plicido, Fazenda Tanque, Slo Jose dos Basilios, Maranhao
"If we had to start paying back now, we have the means to do it. Here, everybodyis working day and
night. Nobody rests. If we always had the courage to work on other people's land, imaginenow, that we
have our own land!! Here,everyone now has something to eat and a little moneyto begin repayment.
Everyone here has their bananas -- already producing -- their manioc. They have com, beans and rice;
many are also plantingwatermelon. Everythingthat we produce, we need only travelabout 6km and we
can sell it."
- Sr. Manoel Xavier Filho, FazendaBelmonte,Bacabel,Maranhao
"Everything got better. Before, we lived in tents on invaded lands or in lean-tospaying rent. We only
worked one or two days each week. The children were always ill. We lived in true hunger. Today, it's
been almost two years since we bought our land and eveything is better. It's like leavinghell for heaven!
Now, look, we have this beautiful house; there's work for the whole family. We've got a school, here in
front And we have food every day. Here, everyone is working. At night, we have a schoolthat operates
with battery light, from a tractor. In the moming we have to push the tractor since the battery is weak, but
it's our tractor! The school was built by the community. The municipalityis paying for the teacher. Our
lives have improveda lot."
-Sm. Josinete de Jesus, Fazenda Itariri, Conde, Bahia
"What's importantfor us is now we have land to pass on to our children. Now, besidesthe land, we also
have cattle, we have milk for the children; we have pork to eat and sell. Before,we had nothing. To repay
the loan, some members already have a little money set aside for the first payment. Since our primary
activity will be livestock, we're going to pay the loan with livestock production.As we say around
here,"The calvesbelong to the bank."
-Edilson, community of Maria Izabel,Gravata, Pemambuco
"We've fought for this land more than 50 years. Many gave their lives. More than 100families were
thrown off and today many of them are suffering in the big cities. Those of us who stayed to fight and
work, we are very satisfiedbecause now we can buy the land where we were born and raised, where my
parents and grandparentswere bom and lived until they died. Now, we are goingto work and live in
peace."
-Leaders from nine community associations,Fazenda Gaiolinha,Maranhao
"The land was expensivebecause it was already producing. It has 390 ha of pasture and another 100 ha
are cleared for cultivation. Lots of water, fencing and roads. Ready to produce.Imagineif we had
purchased land without improvements-- as poor as we are -- how wouldwe work it? Never. We'd have
to sell everything,includingthe land, to pay off the Bank. We and the representativesof the local Rural
Worker's Union checked out every inch of this land before we bought it. Our associationdreamed about
buying this land. We already calculated the value of the improvementsto the land and we believe that, if
we had needed to invest in them ourselves, we'd have needed double or triple what we paid for land."
Sr. Jose Mario Miranda, Boa Vista do Acarai, Balsas, Maranhao
" We know that we still have to work hard to grow and have a better life. We're going to need credit to
improve our production. Nevertheless,even without the credit, we already feel more secure. We have a
place to work, live and raise our children. Before, we lived like dogs without a master: moving from place
to place, like gypsies....those of us that had land, it was nothing but a small bit, not even enough to support
the family. Now, it's all different: with this land, we feel like people, everyonerespects us, because we
are producers and owners."
- Sr. Ciriaco Santos, Fazenda Sitio Campinas,Sao Luis, Maranhgo
9
ensure viability of this project. In addition, 60 ha are being clearedfor the production
of subsistencecrops.Additional areas can be irrigated in the future.
Improvementsin the quality of life of the beneficiaries are clearly noticeable.Now,
all beneficiarieshave their own houses with water and electricityand declarethat
they are now able to send their children to school. Eight beneficiariesalready own a
refrigerator, and eight own televisions.
Ceari
The Second Requestrelates the two communities below as examples of land purchase
price variations in the same state and with similar soils, as describedin the laudos. We
focus here on the ability to pay of these two properties/associations. It also questions the
prospects for success/viabilityof repayment due to the apparent lack of community
organizationalexperiencein two other associations. The aspects relatingto community
organization were discussedat length in the first ManagementResponse.
Fazenda SAoFelipe, Municipiode Acaraui
* 25 families, 330 ha, purchase price: R$200,625 (R$8,025 per family, R$608/ha)
* The price of the land has been higher than that of other propertieswith the same land
use class due to the locationof this particular property at only lkm distancefrom the
coastal city of Aracau6.The Request compares this propertyto anotherproperty (Santa
Rosa in Bela Cruz), which is located in the transition area from the coastalto the
much more difficult semi-arid zone with much lower market prices of land.
* The property is suitable for cultivation of coconut, cashew and food crops. Thirtyfive ha are alreadyplanted with coconut. In addition, the communityintends to plant
further 20 ha with irrigatedcoconut and 29 ha with cashew. The combinedrevenue is
expected to be around R$ 184,000per year (or R$7,400 per family). Comparedto
repaymentobligationsof about R$800 per year, viability looks assured.
* The associationreceives visits from the state extension agency EMATERCEtwice a
month. The associationhas already received PRONAF credit for fertilizer.
Associacao ComunitariaSanta Rosa, Municipio Bela Cruz
* 30 families, 1,430ha, purchase price: R$144,450 (R$4,815per family, R$101/ha)
* The price of the land has been lower than that of other propertieswith the same land
use class due to the location of this property in the less valued transitionarea from the
coastal to the semi-aridzone.
* At the time of purchase,the property had 50 ha of cashew. Another 100ha of cashew
and two ha of bananashave been planted by the beneficiaries in additionto cassava,
beans, and corn.
* The associationis currently constructing houses for each family and receives monthly
visits from the State extensionagency.
* The associationplans to have 500 ha (or about one third of the property)planted with
cashew in five years with expected revenues of R$ 105,000or R$3,600per family. In
Annex A: Informationon Properties listed by the SecondRequest
This annex presents informationabout properties that the Requestershave cited in
supportof specific allegations made regarding purchaseprice and economic/financial
viability of subprojects.Repayment installmentsand estimatedreturns are all expressed
in constant prices of 1999.
Bahia
Several communityassociations in Bahia purchasedproperties from a small number of
timber and cellulosecompanies in the northern coastal zone of the State. These properties
possess excellent conditionsof access and excellent prospects for cultivation of coconut,
fruits and livestock (see Box 1 in the First Management Response).Land purchase prices
were very low for the productive potential of these properties. Accordingto detailed
economicprojections,beneficiaries on these properties are likely to achieveamong the
highest income levels of all project beneficiaries.
FazendaAlivio, Municipio de Bonito
45 families, 1,037ha, purchase price: R$103,440 (R$2,299per family, R$100/ha)
* The beneficiarieshave already planted 69 ha of coffee. 10ha of these will be
maintained as collectivearea exclusivelyto serve the debt contractedfor the land
purchase.With expectedrevenues of R$45,000 for 10 ha of coffee,no problem is
foreseenin covering the annual installments.All other cultivationwill contribute to
improvedincome of the beneficiaries, including an additionalfive ha of coffee per
family that are planned.
* The Requestersquestioned the values used in the laudos for kilometersof fencing.
Interviewswith local farmers have confirmed that R$1,900/kmis an appropriate
estimatefor the replacement cost of a fence of the given characteristics(4 wires).
However,the estimation of the market value of the propertydoes not use this
replacementcost estimate, as suggested in the Request. Instead,a depreciated value
of R$646/km(or R$12,920 for 20km) was used and includedin the estimation of the
propertyvalue.
*
FazendaPorteirasde Baixo, Municipio de Piata
* 75 families, 1,382ha, purchase price: R$52,029, (R$694 per family, R$38/ha)
* This propertyis located in the Cerrado and has significantlyless favorable conditions
than FazendaMarajoara (see below), explaining the large differencein per ha land
prices, but is also suitable for coffee plantation. Annual revenuesof R$2,400 per ha
are expectedon this property. Water is available from a nearbyperennialriver.
* The associationplans to set aside 10 ha of coffee exclusivelyfor the repayment of the
land loan.An additional 138 ha of coffee are planned for individualcultivation,
which will contributeto personal income. The beneficiaries already own 100 heads of
The Requestersselectedproperties included in the upper boundary in terms of per hectare
costs and comparedthem with the average INCRA price for the State,not with the
INCRA price for that microregion. Additionally, they assumethat only price and not the
productive capacityof the property is the determinant of the capacityto repay on the part
of the Project beneficiaries.
Fazenda Belmonte,Municipio de Bacabal
* 14 families, 316 ha, purchase price: R$94,800 (R$6,771per family, R$300/ha)
* This propertyhas excellent soil conditions and good infrastructure.Of the property's
316 ha, 290 ha can be cultivated and have medium to high fertility. In addition to
good rainfall conditions,the property has access to a perennialriver.The purchase
price comparesfavorablyin a local comparison of purchaseprices providedby Banco
do Brasil,the extensionservice, the rural labor union, and the land registry.
* Currentproductionincludes 60 ha of corn, cassava and rice, 10 ha of bananas, and 4
ha of horticulture.Beneficiariesown 12 heads of cattle. Cultivationmight generate
income on the order of R$100,000 per year (about R$7,000per family) leaving no
doubt about repaymentcapacity and income increase for the beneficiaries.
Beneficiariesestimatethat their income has already at least tripled as the result of the
Project.
Fazenda Boa Vista do Acarai, Municipio de Balsas
* 25 families,1,023 ha, purchase price: R$180,000 (R$7,200per family, R$176/ha)
* This propertywas negotiatedwith an area of 800ha for R$180,000.Subsequent
measurementshave confirmed an actual property size of 1,023ha,resulting in an
effectivepurchaseprice of R$176/ha. Discounting for previous investments(20km of
fences,20km of internal roads, bridges, etc.), the propertyprice is R$108/ha,less than
local referencesfor unimprovedland, including the referenceprice of R$130
providedby the local rural labor union.
* 300 ha are suitablefor irrigation with ample water available.Electrificationand
installationof irrigationare underway. 100 ha (equivalentto 4 ha per family) are
being cultivatedthis year already. Given the production already underwayand the
high level of organizationof the community, there is no doubt about the viability of
this project.
J
FazendaAlegria, Municipiode Goncalves Dias
* 22 families,600 ha, purchaseprice: R$150,325 (R$6,833 per family, R$250/ha)
*
The price of land discounted for the value of previous investments (terra nua) is
estimatedat R$139/ha,which is equal to the average of local referencevalues. Given
good access to the market town (20km), availability of electricityand good water
resourcesas well as fences,the price is considered appropriate.
* About400ha of the 600ha of the property are soils of good quality. Beneficiariesare
already cultivatingabout 2.5 ha per family in subsistencecrops. Beneficiariesare
preparingthe land for planting 150 ha with rice, corn and cassavaand are undertaking
an irrigationproject for 30 ha. Depending on the crops planted in the irrigatedarea,
revenuesmay be about R$140,000, or more than R$6,000per family. This would
leave ample returns for repaying the loan (aboutR$700 per family per year).
Fazenda Gaiolinha, Municipio de PresidenteVargas
145 familiesin 9 associations, 3,627 ha, purchase price: R$253,890(R$1,750per
family, R$70/ha)
* Nine associationspurchased parts of one larger property.The beneficiarieshave lived
on this land for 40 years and have been subject to attemptsof expulsionby previous
owners. Several casualtieshave occurred in the past in the conflicts surroundingthis
property.
* The overall propertyhas relatively homogenous characteristics,thus resulting in
identicallaudos. The division into 9 associationswas requestedby the beneficiaries in
line with their current location and organization in severalcommunities.
* The negotiatedprices of R$70/ha is somewhatabove a market reference value of
R$58/haprovided by a local bank and union but withinthe range of reference values
used by INCRA for this municipality (R$38-124 for the land without improvements).
The purchaseprice is justified by excellent soils, good infrastructure(including
power, roads, schools and churches) and good access to water (a perennialriver
crossesthe property).
*
Fazenda Sitio Campinas,Municipio de Sao Luis
* 69 families,383 ha, purchase price: R$288,949 (R$4,188 per family, R$754/ha)
* This property is located in a peri-urban setting, only 20km from the capital city of the
State of Maranhao, Sao Luis, and 5km from a paved road. Urban and industrial
growthin the region is leading to rapid property appreciation.INCRA's reference
pricesfor this area range between R$800 and R$3,600/ha.Neighboringproperties
havebeen sold at a multiple of the R$754/ha paid by the beneficiaries.The land price
is low consideringthe excellent market access and the suitabilityof the land for high
value horticultureproduction as well as the good rainfall conditionsof this region.
* The investrnentgrant of the Project is being used for housing,drinking water supply,
electrification,and a well and irrigation system for 20ha of fruit and horticulture
products. With about one third of a hectare of horticulture,each family can expect
gross annualrevenues of R$5,000, which leaves ample fundsfor coveringproduction
costs,loan repayment (about R$500) and increase in family income from a preproject level of typically R$1,000.
* Futureplans (to be financed from internal savings or external credit) include
permanentcultivation of oranges and mango.
FazendaMaracassume/SaoRafael, Municipio de Viana
* 31 families,503 ha, purchase price: R$25,100 (R$810 per farnily, R$50/ha)
* The owneroffered a property of supposedly 1,089ha. Since the documents provided
by the ownerwere not consistent with the property register, a survey of the property
was recommendedduring the technical evaluationof the proposal. This survey
determinedthat the actual size of the property was 503ha. As providedin the Project
manualsfor such cases, the resurvey of the property determinesthe actual amount
paid for the land. In this case, the owner had to return the excesspayment he
received.This repaymentby the owner was made. As a result of this resurvey, it
became apparent that beneficiarieshad received smaller land than expected,at a
proportionallylower price. Beneficiariesare now consideringpurchase of additional
adjacentland.
Fazenda Tanque,Municipio de Sao Jose dos Basilios
* 20 families, 554 ha, purchase price: R$100,876 (R$5,044 per family, R$191/ha)
* Demarcationof this propertyresulted in a correction of its actual size to 554 ha with a
price of R$191/ha.This price is somewhathigher than most (but not all) reference
values for this municipality,which range from R$80-300. Given its favorable
location(8km to the nearest market town), its good soils, and accessto a perennial
river,the price appearsjustified.
* The propertyhas 460ha suitable for cultivation. Currently, 45 ha are planted with rice.
Another 120ha are temporarily rented out. The communityis currently constructing a
well and installingirrigation for 60ha of rice and bananas. This cultivationmight
produceannual income of R$120,000 or R$6,000 per family, leaving no doubt about
financialviability.
ANNEX B: Project Supervisionand ImprovementsIntroduced&1.
The implementationof the pilot Project has been a period of learning during which
important lessonshave been leamed through intensive supervision,internationaland
national seminars,studies and workshops. The Project is part of the Bank's Compact for
Rural Developmentand has received more than average supervisionsupport.Some 82
staff weeks have been used in Project supervision over a 27-monthperiod, well above the
average for other projects in Brazil, and with more than 70% of supervisiontime
provided by staff of the Bank's Brasilia and Recife Offices. Besides formal supervision
from Bank Headquarters,project staff in the field offices have made some 30 visits to
participatingstates since the project started. The Project has also been visited by the
Brazil CMU Director and other Bank Directors -- including from the Africa Region --
and by the RegionalVice Presidentfor Latin America and the Caribbean. In addition, the
Project has been discussedin three major seminars with extensiveparticipationfrom
Govemment and the Bank, the private sector/civil society, NGOs, academia,intemational
specialists and multilateral/bilateralorganizations. There have also been a number of
workshops involvingthe State Technical Units with the associationsin each state, the
latest one with all 50 associationsof the State of Pernambuco. In addition, the Project
has been evaluatedby private consultants and universities. The result of all this activity
has been a series of lessonswhich have been or will be incorporatedas changes or
adaptations in the existing project and the design of the follow-up,Adaptable Program
Loan. These include:
(a) Access to Land. A central lesson learned and the messagebeing received from many
organizationsand the beneficiaries themselves, is that the target population for land
reform wants accessto land in a rapid, participatory and less conflictivemanner, even
though they know the land must be paid for. Proof of this was the huge demand for
purchase of land which exceeded 40,000 families by the end of the first year of
Project implementation.The market-based approach piloted under the project
expedites the settlementof landless rural families, with land acquisitionfrom
identificationto purchase typically taking less than 90 days. Further, projected
household incomes (five years after land acquisition)range from 3 to 10 times the
pre-projecthousehold income and permit these householdsto servicetheir land loans.
To date, familieshave generally chosen fair to good quality land acrossthe diverse
agroclimaticconditionsprevailing in the Project area at costs that representsavings
relative to traditional methods of land reform and without exertingupward pressure
on land prices. Targeting has been effective and efficient, the vast majority of
beneficiaries havingcharacteristicsconsistent with the target population.
(b) Size of BeneficiaryGroups: It has been observed that groupsshould have a
minimum of 10 familiesand a maximum of 30 to 35 for optimal performance.
Groups smaller than 10 families are likely to have difficulty formingan association
board, which is a condition of eligibility for land; and, the resourcesavailable to a
very small group are likely to be insufficientto make certaininvestments,either due
to cost as in the case of rural electrification,or to under-utilizationof purchased
equipment,in the case of a tractor. For groups of over 50 families,experiencehas
' An update from a similar annex in the original Management Response.
shown that managementof a rural property by a large group can be difficult and that
the tendency, demonstratedin traditional, i.e. expropriation-basedland reform
settlements,where 100,200 or more families are settled, is for such groups to
ultimatelybe sub-dividedinto smaller groups of around 50 familieswhich then create
their own associations.
(c) CommunityInvestments: Experience of land reform over many decadeshas shown
that to avoid out-migrationand keep families on their land, conditionsmust be
created for them to establishthemselves in the area immediatelyafter land is
acquired. In the case of the market-basedpilot, a mechanismwas introducedby
which, immediatelyafter land acquisition,the Technical Unit calculatesthe amount
of communityinvestmentto which each beneficiary associationis entitled,plus aid in
the amount of US$1,300.00for the cost of establishing each family. The TU
authorizesthe Banco do Brasil to draft a single contractwith the association,with
investmentsubprojectresources being blocked in each association's account until
subprojectproposals are approvedby the Technical Unit, at which point the resources
are rapidly unblockedand disbursed. This streamlinedmechanismhas brought many
advantagesto beneficiaryfamilies, permitting them to immediatelyuse the aid money
to move in and get established.The certainty of being able to use resources for
investmentsin the land acquired, without the need to work as paid laborersto support
their families,is an incentivefor beneficiaries to establishthe propertyrapidly and
start farming.
(d) Organizationsof Associations: Although many beneficiaryassociationswere
formed several years ago and are well-organized, others were formedonly very
recently.Experience has shown that these more recent associationscan tend to lack a
set of agreedprinciples to guide interpersonalrelationshipsbetweenthe groups
formed,and an understandingof public policies and basic notions of planning, which
are needed to make settlementssustainable. These issues have been discussed at
length with participatingstates and the Nucleus of AgriculturalStudiesand
Development(NEAD), and recommendationshave been adopted for the proper
training of settlers to efficiently implement and start settlementactivities, creatingthe
foundationsfor the settlement's sustainability. This modelfor buildinghuman and
social capital will also be a feature of the proposed follow-upProject,should the
Bank go ahead with its financing.
(e) TechnicalAssistance: Studies/observationsduring the first year of project
implementationindicatedthat official technical assistance (TA) has fallen short of
expectationsin both quality and timeliness. The Project calls for TA funding for the
preparationand implementationof community investmentsubprojects. However,
communitiesneed more effective and efficient TA in planningfamily fanning
activities, i.e., the productionof crops and their processing, storageand marketing.
During implementationof the pilot, alternatives have been discussedwith the States
to improveTA for beneficiary families, especially in the first three years of
settlement. The amount allocated for the community to purchaseTA has been
increasedduring the land purchase process and subsequentproductionplanning over
the first three years after installationto help ensure increasesin productivityand
incomes.
(f) Financial Charges: When the Project was prepared, the Long-TermInterest Rate TJLP - was selectedby the Government to apply to the credits obtainedby
associationsto purchaselands and to define the financialchargesfor each loan. The
payment period as defined was up to 10 years, with up to 3 years' grace. Studies
done by the Nucleus of Agricultural Studies and Development(NEAD)indicated
that, in someregions such as the northern litoral (coastalregion) of Bahia and Ceara,
lands acquiredby associationscould be paid for in the periodstipulated.In other
regions, however,principally the semi-arid, which is subjectto frequentdroughts,
families couldfind it hard to fulfil their repayment obligationsin years of drought. In
addition, with the rising interest rates, the TJLP rose significantly,becoming
burdensomefor small farmersbenefiting from the Project. The TJLP is no longer
used to define financial charges stemming from the loan and has been replacedby the
loan conditionsof the Banco de Terra, which include a fixed real interest rate of 4%
p.a. and a paymentperiod of 20 years. These new charges and terms will also be
applied retroactivelyas a refinancingof current land loans. There will be no loss to
Project beneficiaries,since no portion of the loans contractedhas yet expired.
(g) BeneficiaryParticipationand Consultative Councils: The design of the Project
places beneficiariesin the driver's seat, and its success depends entirelyon their
active participation,through community associations, in all stages of the Project
cycle. Experienceto date has been very positive at the communitylevel, with the
associations(manyof them pre-dating the Project) showingstrong interest, initiative
and active participation. At the same time, the Project also envisagedthe creation of
a ConsultativeCouncil in each State, comprising representativesof Governmentand
organized civil society, including churches, unions (of ownersand workers)and other
non-governmentalorganization(NGOs). In contrast to the active grassrootslevel
communityassociations,the Councils' performance in the first year of
implementationhas been below expectations. The Governmentis reviewingthe
functions,compositionand procedures of the Councils to identify ways to increase
their effectiveness. The formal philosophical position of some of the Requester
organizations,against market-basedland reform, is a complicatingfactor,but the
Governmentis in the process of renewing efforts to obtain participationby these
groups.
Annex C: Efforts to Communicatewith the Requesters
Bank managementand staff have consistently demonstratedopennessand desire for
frank and serious direct communicationswith all groups of society. In this spirit,
management and staff have continued to work closely with the beneficiarycommunity
organizationsand with grass-rootbranches of the national organizationsinvolved in the
Request; have welcomed opportunitiesto meet with individualsrelatedwith some of the
national organizationsthat comprisethe Forum of the Requesters,in an effort to establish
bridges with them (see paras.1-5 below). Managementand staff have so far not been
successful in their efforts to comrnunicatedirectly with the Requesters(paras. 6-8 below).
1. A meetingbetween Bank staff working with the Project, Bank NGO liaison staff and
a representativeof the Brazil Network (Rede Brasil), one of the organizationsof the
Forum, took place in Washington on June 3, 1999. This was an informal meeting
geared to a basic exchange of information. The discussioncenteredon the Forum's
oppositionto the Bank-fundedLand Reform Pilot Project and the efforts that both the
Bank and the Governmentwere willing to make in order to actively engage national
civil society organizations(CSOs) in project implementation.
2. On August5, 1999,headquarters and Bank country staff workingwith the Project and
Bank NGO staff met in Natal, Rio Grande do Norte, with representativesof statelevel federationsof rural workers (FETAGS) of 8 Northeasternstates and a
representativefrom the National Confederations of Rural Workers (CONTAG)part
of the Requesters' Forum (and of which FETAG are the state branches).The
discussionwas an informal exchange of views betweenFETAGand the Bank on the
pilot project.
3. During a meeting on August 24, 1999 with leading CSOs in Salvador,State of Bahia,
Bank staff, including the Regional Vice President for LAC, Brazil CMU Director,
and Bank NGO liaison staff, dialogued with the Presidentof the Bahia Federation of
RuralWorkers (FETAG). At that time, the Presidentstated, "The Federation is not
againstthe Bank funding agrarian reform in Brazil, and local landlessfarmers have
welcomedthe program." He further stated that now that the movementhad lost the
battle to have the Cedulada Terra blocked (they were not awarethat the Second
Requestwas presentedto the Bank), he hoped that they couldtry to influenceit in
order to allay their concernsregarding farmer indebtedness,and to improve its
implementation.
4. On September29, 1999,during the Bank's Annual Meetings,the Director for the
Brazil Department,a representative of the LAC Vice President's office, the regional
and Brazil departmentNGO liaison officers, regional and Brazil departmentexternal
communicationsstaff, a Bank-wide lead specialiston AgrarianReform issues and
Bank Director, representativeof the Legal Departmentand all staff working with the
CdaT project (both from headquarters and in the field) met with a member of the
Brazil LandlessMovement (MST), accompanied by representativesof three NGOs
from the Washingtonarea. During the meeting, Bank staff reiteratedtheir open door
policy with NGOs and Bank staff willingness and open mindto discuss/reviewall
aspectsof the CdaT project and its proposed follow-up, the Banco da Terra. The
importancethat the Bank attributes to the participationof nationalorganizationsin
the Projectwas also reiterated. Bank management requestedthe intermediationof the
MST member for the organizationof a meeting with the Requesters' Forum. No
response has been obtained to date.
5. During the recent annual Latin American meeting of regionalNGOs with Bank
regional managementlast October,Bank staff working with the Projectmet with a
member of one of the organizationsrepresented in the Forum (RedeBrasil) to discuss
and review the Bank position expressed on all previous occasions.
6. An invitationwas made in early-June 1999 to the Requestersto meet in Brasilia with
the Brazil Country Director and Bank country staff working on the Project,to discuss
results of Projectmonitoring and evaluation studies, improvementsalready
incorporatedin the Project, review any concerns that the Forumhad with the Project
and explore different possibilities for involvementof the nationalorganizationsof the
Forum in Project implementation.The Forum decided not to meet with the Bank at
that time (see attached copies of letters dated June 4, 1999 and June 10,1999from the
Bank and Forum respectively).
7. The Brazil Country Director and country and headquarters staff working with the
Project extended a second invitation to the Requestersto meet in earlyAugust 1999
to discuss, again,ways to include their organizationsin project implementation.
After careful negotiationof a date for the meeting, the Requesterscancelledjust hours
before the meeting (see attached copy of letter dated July 30, 1999).
8. On September 14, 1999, a joint invitation was extended to the Requestersby the
Ministerof AgrarianReform and the Bank's Brazil CountryDirectorto review
evaluationsof the CdaT project, all aspects of its implementationand improvements
already introduced. This invitation was turned down by the Requesters. In the
invitation,both institutions referred to the multiple invitationsthat independentlyhad
been made to the Requesters and to the interest and beneficial effect that the
participationlcontributionof the national organizationsincluded in the Requesters
Forum would have for the CdaT project and its proposedfollow-up,the Banco da
Terra. In their response letter, the Requesters indicated that they have presented a
Second Requestfor the installation of the Inspection Panel for the CdaT,were
awaitingan official position from the Bank regarding the request and this would
make it unnecessaryto discuss the topic at that time. In addition, they referred to a
Bank reportpointing to the impact of neoliberal policies in deepeningpoverty and
misery, especiallyin Third World countries, and that they consideredcontradictory
the Bank's efforts in Brazil to have a meeting to push forwardthe CdaT,a program
absolutelybased on neoliberal assumptions (see attached copies of letters dated,
respectively, September 14, 1999 and September 21, 1999).
Bank managementand staff will continue their open-door policy and their efforts to
engage the national orgaizationsin Project implementation.
Letter from Mr. Nankani to the Executive Secretary of the Forum, dated June 4, 1999
(copy of original letter and Unofficial Translation included)
-I/
Banco Mundial - BIRD
BANCO!NTERNACIONAL
PA
DESENVOLlv2MENrO
IBIRD- The World Bank
REAC*ESTosUrAO
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SCN - Qd. 2 - LoWA - Ed. Corpornw
FinaicialCenter
sals303/304
70710.SOO
- BrasBii - Of
Td.; (061)329.1000
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NMNTERNATIONAL
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BANK
FORRECONSTRUCnOW
AND
DwLOPMENT
WW
11 S,N.W.
SWhinpon,
DC20433.USA
; DCl202)4774USA
2Tel. 244234
Brasilia,04 dejunhode 1999
llmo. Sr.
Isidro Revers
Secretaria Executiva da CPT
F6rum Nacional pela Reforma Agriria e Justiqa no Campo
Rua 19, Nr. 35 1 andar
Goiania,GO
Fax: (062)212-0421
PrezadoSenhorRevers,
Ultimarnente,o F6rum Nacional pela ReformsaAiria a Jus*a no Campo torn
demonstradoem varios momentosprmocupagiocom relaq5o ao apoio do BancoMundial no
programa do ReformaAgrsiuado Govemno
atravcs do ProgramaPiloto Cidula da Terra, e sua
possivolextensiono ProjetoBancoda Terra
Gostariamosde informi-loque essaspreocupac6essorao levadascm contano processo
de olaborasio do fururo apoio do Baaco Mundial ao Govemo Brasileiro na area de Reforma
Agrkia. De acordocom essa
perspectiva,gostaria de convidaro F6rumNacionalpela Reforma
Agriria e Justi9ano Casnpoa participarde uma reunibono dia 17 de junho, quinta-feira,is 1S
horas, no nossoescritdrioem Brasilia,durantea qual conrinuaremosnossa conversa.
Estamosaborts a quaisquersugestos em relacao i agendadtssa remuibo.Baseadonas
suas preocupagies,sugiroque a agendaincluadiscussoesa respeitodo:
* Viabilidadeecon6micae financeirados projetos de reforina agriria financiados
peloBancoMundial;
* Participac,o da sociedade civil no contexto de projetos de reforma agriia
financiadospeloBancoMundial;
* Elaboraio de projetosfinanciadospelo BancoMundialam relacaoi sua naturez
de complernenta;1o
ao modelode desapropriagbotradicional.
Aguardosua respostaparaque possamoscontinuar essaconversa.
ntenciosamente,
obindT. Nankani
Diretor
DiretoriaSub-Regional
Brasl
p
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UNOFFICIALTRANSLATION
Tel (061) 329-1000
Brasilia, June 4, 1999
Mr. Isidro Revers
Executive Secretary,CPT
National Forun for AgrarianReform and Rural Justice
Rua 19, No. 35, Is' Floor
Goiania, GO
Fax: (062) 212-0421
Dear Mr. Revers:
Recently, the National Forum for Agrarian Reform and Rural Justicehas voiced its concern
with regardto the assistanceof the World Bank in the Government'sAgrarianReform
Program throughthe Land Reform and Poverty Alleviation Pilot Project (Cedulada Terra),
and its potential follow-up,the Banco da Terra (Land Fund) Project.
We would like to informyou these concerns are being taken into considerationin the
preparationof the Bank's future assistance to the Governmentof Brazil in the area of
AgrarianReform. As such, I would like to invite the National Forun for Agrarian Reform
and Rural Justiceto participate in a meeting on Thursday, June 17,at 3:00pm, at the Bank's
offices in Brasilia,during which we can continue our dialogue.
We are open to any suggestions concerningthe agenda for this meeting. Based on our
concerns,I suggestthat the agenda include discussions on the followingpoints:
* Economicand financialviability of the agrarian reform projectsfinancedby the World
Bank;
* Participationof civil society in the context of agrarian reformprojectsfinanced by the
World Bank;
* Preparationof projects financed by the World Bank and its complementarityto the
tradition model of expropriation.
I await your response so that we can continue our dialogue.
Sincerely,
Gobind T. Nankani,Director
Country ManagementUnit, Brazil
Response from the Forum to Mr. Nankani, dated June 10, 1999
AGRARI E PELAJUl
PELARtEFORMA
F(6RUM
A NO CAMPO
Secretobns: Com'ssio Pstoral de Twr
Rua 19, Nr 35, 1.Andar
Tel. 062212-66
Fax06212.0421
E-mait cptnac@cuiurcmbr
Goilnia, 0 de junho do 199
Exno. Sr. GabindNankani
Dlretordo BIRDpwa o Brasil
Fax Nr. 06113291010
Preado Sr. Nankani,
am nome do F6run Nacionalpets ReformsAgrira e Justi. no Campo
agradeposua cartade 4 do junho, na qumlo Sr. convida st F*um para ums
discus8o0sobreo futuro apotodo Bar.= Mundialso GovemoBrasileirona Area
de RoformaAgrra.
Tendo rearzado uma sndagam entre as entidadesdo F6ruma respoito,
gostariade cormnar aqul nosa disposiio o interosseem atander ao convit
do BancoMundialparaee debate.Ernetanto,em fungAode sobreposi;Aode
agendasji previoment.eastabecidas,a malara das entiddes manifestousua
impossibilidadecom reIag6oi data quo foi prnpota Ao consunW-as
a respeito
de possiveisdatasattemativas,evidenciou-sequo no restantodo mbede junho
as entidacides
do F6rumapresntam um grandeacsnuwid atvidades,de forma
quo proporfamosque a reunic focs reslizadano mis 3eguinte, de julho, em
data a ser definida.Estamosno momentoverificandoas op8sw possfvais,e em
brevevoltaremosa nos comunicarcom propost altemativasde datas.
Atenciosamente,
F6rumNacionalpole
RefomisAgrArisa Justigano Campo
UNOFFICAL TRANSLATION
National Forum for Agrarian Reform and Rural Justice
Secretariat:
Pastoral Land Commission
Rua 19,No. 35, 1stFloor
Tel (062) 212-6466
Fax (062) 212-0421
email: [email protected]
Goiania, June 10, 1999
Mr. GobindNankani
Director, WorldBank/ Brazil
Fax (061) 329-1010
Dear Mr. Nankani:
On behalf of the National Forum for Agrarian Reform and RuralJustice, I appreciate your
letter of June 4, in which you invite the Forum for discussionson the future support of the
World Bank to the Governmentof Brazil in the area of AgrarianReform.
After consultingthe members of the Forum regarding your invitation,I would like to confirm
our desire and interest to accept the World Bank's invitation to take part in this debate.
However, due to other previously arranged meetings, a majorityof the members find it
impossible to meet on the date that you have proposed. Upon consultingwith the members
as to an alternativedate, we see that the remainder of the month of June already has a number
of meetings scheduled. As such, we would propose a meeting with you in July, at a date to
be later specified. We are presently looking at possible dates, and will shortly communicate
with you again to propose alternative dates.
Sincerely,
Isidoro Revers
c/o ExecutiveSecretary,
Letter from Mr. Nankani to the Forum, dated July 30, 1999
11-NOV-09
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30 de Julho, 1999
limo. Sr.
Isidoro Revers
Representante
F6rum Nacional pela ReforMaAgriia e Justica no Campo
Rua19, Nr.35 1andar
74001-970
Goiniia GO
Prezado Senhor,
Apoto do Banco Mundial ao Programa de Reforma Agrdria do Governo Brasileiro
Conforme decisaotomada pelo F6rum Nacional pela Reforma Agrariae Justiga
no Campo e nos informadohoje por V. Sa. nlo foi possivel re-aliarmos a reuniao
anteriormente agendada entre o F6rum e o Banco Mundial para discutir o apoio do Banco
Mundial ao Progruma de Reforma Agrana do Govemo Brasileiro. Lamentamoso faxode
nao haver sido possivel realizar esta reuniao, pois estamos desde maio deste ano tentando
agendar uma reunilo com o F6rum para discutir o assunto.
0 objetivo desta reuniao agendada para hoje era justamente discutir, de forna
franca e aberta, as criticase diavidasque o F6rum tem sobre os programasfinaciados
pelo Banco, inclusive aparentesquest6es relativas a dados do INCRA sobre os resultados
do Projeto Cedula da Terra. Entendemos que o F6rum esti preparando um documento
que analisa estes dados, e portaato aguardamos o envio do mesmo para podermos
entender melhor suas preocupap8es. Creio ser fltil informn-los que relat6riosde
avaliac5o do Projeto patrocinadopelo Banco Mundial, bem como a lisa de wodasas
propriedades j;i compradaspor associaq8esde assentados estlo listadosna Intemet
(www.daraterra.org.bre www.neadgov.br) e porEantoamplamente disponiveispara o
F6rum e outras entidadesda sociedade civil. Um primeiro esmudoda avaliagao
independente sobre o Projeto Cddulada Terra realizado pela UNICAMPesti em fase de
conclusio e o relat6riomamb6mestara disponivel em breve.
Devo reiterar que o Banco Mundial considera a pardicipasaoda sociedade civil no
Projeto C6dula da Terra importance,pois pode desempenhar um papel estrat6gicode
organizar associaq6esdc asscntados, prestar assessoria tecnica o monitorar os resulmados
do Projeco. A parEicipaqoativa dos beneficiarios e de movimentos sociaislocais
(sindicatos, igreja, ONGs)ji estz ocorrendo, mas seria irnportanteque organiza0es de
cuaho nacional tambdm participassemdo Projeto aportardo de fonmacomplemenmrsua
capacidade de anAlisee de assistincia tecnica.
RCA 248423. W UdJI6145
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30d; Julhode 1999
Neste sentidoo GovernoFederal,com o apoio do BancoMundial,recentemente
tomou vfiriasiniciativasc medidaspara aprimoraro desempenhodo ProjetoCkdulada
Terra e encorajara participaqAo
da sociedadecivil. Algumasdestasmedidasforam
tomadas,inclusive,emrespostaa sugestoesde entidadesrepresentadasnoF6rum-Estas
incluem:
1. Determina,o de gue agoracm diante,nenhumaareapassivelde expropriafo
seja finciavel peloProjetoC6dulada Terra excetocomaprovaqiode um
conselhoestadualcompardcipaqjoda sociedadecivil.
2. Prolongamento
do prazodos cmprestimose diminui;o da taxadejuros para
quitaqlodos empr6stiraos
para comprada terra igualas condiqaes
recentementeaprovadasparao Banco da Terra.
3. A participa;Aoda sociedadecivil e movimenrossociaisemconselhos
esTaduais
para o monitoramentoda implemenWaodo progman Entendemos
tambemqueo Govemotem convidadomembrosdo F6rumpaa participarno
ConselhoNacionaldoBancoda Tera no qual participamvrios Ministrosde
Estado.
4. Disponibiliza;dode recursosa gruposligadosao FORUMpara realizar
estudostdcnicosvisandofornas de aprimoraro programatradicionalde
reformaagriia.
Por fimn,
informamosqueesramosseguindoo processode negociarcomo
govemo um nova emprestimopara o Projeto Banco da Terra com as mesmas
caracteristicasacimamencion.adas.
Esperamosque esranegociaLqoesrejaconcluidano
futuro pr6ximo. Ao mesmotempo permanecemos em abercopara discunirdividas
pendentese formasde incluira parricipaqAo
adva das enridadesdo Forumno Projeto.
Sem mais pelo momentao,
subscrevo-me,
Aten samente,
G md T. Nankani
Diretor
DiretoriaSub-Regional
Brasil
The World Bank
SCN - Qd. Z - Lot A
Corporate FinancialCenter Building
Suites 303/304
70710.500 - Brasilia - DF
Tel (061) 329-1000
July 30, 1999
Mr. Isidoro Revers
Representative
Rua 19, No. 35, 1" Floor
74001-970
Goiania, GO
Dear Sir,
World Bank Support to the Agrarian Reform Program of the Government of Brazil
In accordancewith the decision taken by the National Forum for AgrarianReform and Rural
Justice and communicatedto us today by you, it was not possible for the Forum to have the
meeting previouslyscheduledbetween the Forum and the World Bank to discuss World
Bank support to the AgrarianReform Program of the Governmentof Brazil. We regret that
it was not possible to have this meeting, given that since May of this yearwe have been
trying to schedulea meeting with the Forum to discuss this issue.
The objective of today's scheduledmeeting was precisely to discuss,in a frank and open
manner, the criticismsand doubts that the Forum has about the programsfinanced by the
Bank, includingapparent questions related to data from INCRA regardingthe results of the
Cedula da Terra (Land Reform and Poverty Alleviation Pilot) Project. We understand that
the Forum is preparinga document which analyzes these data, and as such we await receipt
of this document in order to better understand your concerns. I believe it is useful to inform
you that evaluationreports funded by the Bank of the Pilot Project, such as a listing of all
properties purchasesby community associations can be found on the Internet
(www.dataterra.org.brand www.nead.gov.br ) and as such these reports are widely available
to the Forum and other entities of civil society. A first independentevaluationof the Cedula
da Terra Project,conducted by UNICAMP (University of Campinas,Sao Paulo, Brazil), is
now being concludedand this report will also be available shortly.
I should reiterate that the World Bank considers the participationof civil society in the
Cedula da Terra Projectto be important,since this can play a strategicrole to organize
associationsof settlers, provide technical assistance and monitorthe results of the Project.
The activeparticipationof beneficiaries and local social movements(unions,churches,
NGOs) is already occuring, but it will be important that nationalorganizationsalso
participate in the Project, offering in a complementarymanner their analytical capacity and
technical assistance.
In this vein, the Governmentof Brazil, with the help of the WorldBank. recently took
various initiativesand measures to improve the performance of the Cedula da Terra Project
and encourage the participationof civil society. Some of these measureswere taken in
response to suggestionsfrom entitiesrepresented by the Forum. These include:
1. A decision that, from now on, no land that is potentially expropriablewill be financed by
the Cedulada Terra Project, except with the approval of the State Council with the
participationof civil society;
2. Extension of the terms of the loans and reduction of the interest rates for repayment of
land purchases equalto the conditions recently approvedfor the Land Fund (Banco da
Terra);
3. The participationof civil society and social movements in State Councils for the
monitoring of Project implementation. We understandalso that the Governmenthas
invites membersof the Forum to participate in the National Council of the Land Fund, in
which various State Ministers participate.
4. Availabilityof resources for groups linked to the Forum to conducttechnical studies
seekingways to improve the traditional program of agrarian reform.
In closing,we inform you that we are continuing the process of negotiatingwith the
Governmenta new loan for the Land Fund (Banco da Terra) Projectwith the same
characteristicsmentionedabove. We hope that these negotiationswill be concluded in the
near future. A the same time, we remain open to discuss pendingdoubts and ways to include
the active participationof the entitiesof the Forum in the Project.
Sincerely,
Gobind T. Nankani,Director
Brazil Country ManagementUnit
Joint Letter from the Minister of Agrarian Reform and Mr. Nankani to the Forum,
dated September 14, 1999
Brasilia, September14, 1999
Mr. D. Tomas Balduino
Executive Secretary
National forum for AgrarianReform and
Justice in the Countryside
Dear Sir,
The ExtraordinaryMinistry for Land Policy and the WorldBank have been attempting,
independently,over several months, to discuss with representativesof your organization your
doubts and concernsabout the Brazil Land Reform and Poverty AlleviationPilot Project
(Cedula da Terra). On this occasion, and in a joint manner, we would like to renew our
invitation for the National Forum for Agrarian Reform and Justice in the Countrysideto
participate in a dialogueconcerning this project and pertinentquestions,as well as about
aspects relevantto the Land Fund (Banco da Terra). As we have reiterated on various
occasions, we are open to the constructive involvement of civil societyorganizations,as we
considerthis involvementextremely importantto ensure the effectivenessof the projects.
In this regard, we propose a meeting of the civil society organizationsinterested in
agrarian issues, the ExtraordinaryMinistry for Land Policy and the World Bank to discuss
the results of the latest evaluations of the Brazil Land Reform and Poverty AlleviationPilot
Project (Cedula da Terra), as well as implementation details, modificationsalready made in
the program and otherpertinent information.
We suggesta meeting in the ExtraordinaryMinistry for Land Policy, on September 24,
at 11:30 am, on the 18thFloor, Room 1818.
We look forward to communicationregarding your participation.
Sincerely,
Raul BelensJungmann Pinto
ExtraordinaryMinisterfor
Land Policy
Gobind T. Nankani
Director
Brazil - WorldBank
Letter from the Forum to Mr. Nankani, dated September 21, 1999
FORUMNACIONALPELA REFORMA AGRARIA E JUSTII:A NO CAMPO
Of. Si- 1999
Br-o9b,t2tg
SenhorDiretor,
A prop6so do scpedlent subst
Extaordinifo de Polta Fuw4Mila
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manila comna oo4ettvodo iscir ape
7rw. tmors a corwduur.
SweIb
corduntament. porVouma
a pdoloSit.
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corvwsis oniades dust.F*
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PaiW d Inpe.9 sobroa citdo prorama, omnbaso em decm nthio c zbsbnc
atetndo I nim
irrlularades na sua ocu5o. SiGnllcaquo as ontdades do hinu
lms
encontwmse nia mq*Waf do posiconamento ofdal do Sd sabre o plait, a qu x
dk=osul sobre o twem nos opotndkdee puriha i htMInaftba
dosnecrssia quadquwr
2.
hi algunsdia%o BancoMundiadivulgouRoht6lo apontandoa
dao mo o do
mls6rla,especllments nos palsesdo tereearomundo, por contados sfeos do prqeto neobea&l
impostopolospaisesdro Nest senido, julganos contdt6fo a mpenhodoBid, no BruM,pela
realizagic de umrs unhloquo visa impulsionaro CddIu de rwr. progrart abwlutamonst
etwas de
enquadradonos pmssuposts neolberals, a portanto, InoompWelcom estrg
dosenvoMmento
dos parsespobresdJeacordocom o pr6pricBird:
Ants o expou, e manifestndoo annhamentodo F6rumcornos seores do Birdquoconduempow
Iniquldadedo projetoneoliboral,enfaozamos
a Vossa Senhoriatodo o Intresseewndiscur Whosde
coIaboragio cornossainstdtgo no sentidoda IadIcagdo da subdesenvohmentono Bsi que,no
caso do agririo, nio viumbrmnos outraaltmawa cue nAo sojaa promoglo de
eurn
tt ama hvL
polPfcade reformaagrila.
PI Entidadcdo Phrw
AOSenhor
Grabind nkanl
Diretordo BancoMuncdW
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O FRU
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CPT ; CCN=TA; MIST: )ATS; CXASX
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CoNDsEFJ P2DE BEASZLJ CA.PTAS7 CESa; A;OCR; EAER
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C;
UNOFFICIAL TRANSLATION
NATIONALFORUMFORAGRARIANREFORMANDJUSTICEIN THECOUNTRYSIDE
Letter w/o number - 1999
Brasilia, September21, 1999
Mr. Director,
Regarding the communicationsigned jointly by yourself and the ExtraordinaryMinister
for Land Policy inviting the entities of this Forum to participate in a meeting to discuss aspects
related to the operationalizationof the program CeduladaTerra, we consider:
We remind you that the Forum recently presentedto the IBRD a second request for
1.
installation of the Inspection Panel for the referred program, based on documentation
substantiating and attesting to numerous irregularities in its execution. This means that the
entities of the Forum are awaiting an official position from the Bank regarding the request,
which makes unnecessary any discussion on the topic at this time in parallel with the formal
process;
A few days ago, the World Bank disseminateda Report pointing to a deepening of
2.
poverty and misery, especially in third world countries, as a result of the effects of neoliberal
policies imposed by the rich countries. In this regard, we consider contradictory the Bank's
effort in Brazil to have a meeting to push forward the Cedula da Terra, a program absolutely
based on neoliberal assumptions and therefore incompatible with effective development
strategies for poor countries according to the Bank itself;
In view of the above, and manifesting the alignment of the Forum with the sectors of the
Bank which have concluded about the inequity of the neoliberalproject, we emphasize to you
our full interest in discussing collaborative actions with your institution to eradicate
underdevelopmentin Brazil for which, in the case of the agrarian sector, we do not envision
any otheralternativebut the promotion of an effective and massiveagrarian reform policy.
[signed]
D. TOMAZ BALDUINO
ExecutiveSecretary for
The Forum entities
To: Mr.
GobindNankani
World Bank Director for Brazil
Brasilia - DF
ENTITIESWHICH COMPOSETHE FORUM
CPT; CONTAG; MST;MLTS;CNASI;ASSERA; INESC; Agriculul Secretariatof the PT; ABRA; MNDH;
IBRADES; IBASE; DESER;ASPTA; IFAS; FASE; CAPOIB; MAB; CNS; CNIC; CUT;CONDSEF; REDE
BRASIL; CARITAS; CESE; ANMTR;FASER
Annex D: Letter from Minister of Agrarian Reform on Land Purchase and Other Credit
(copy of original letter to Mr. Nankani, dated November 10, 1999,
and Unofficial Translation included)
11-NOV-99
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Na oponundade am qw cumprimento Vossa Senhoria, comwdco que fomos
aurotzados a liberar mais RS 55.550 mil parte do saldo remamscente do acordo de
emptlrnmo desse Banco Mdn(BJRD)
com o governo braialeto, para fi7anclar Os
wnestimentos em ffra-esauwa bascwadas filiasa nos Estados do Maranhao, Ceart
Pernambuco, Bahia e norre de Mbias Gerafs, a serem atendldas no nmb/todo Programa
Cidula do Terra
Esra awor=faio se di no mornmeno em qwe
romeremos
aproxmadmen1e mats RS 40.000 mU, do Fmtdo Baco da Terra, 4. modo a asegwrar a
contrapanidLa necess4ri ao fizwmaemo de aVdsuido d* urras, do goremo brasilro,.
em conformidade com ao
audd =cordode emprtimo com esse Banco Mundlal
Esses dois montames garanirdo o aterdmemo a mals 10 mififaaiar quze,
somadas &s8 mrIn
jd aend&=,
1
otallwemos 18 rmilfamihs, superando, portamo, a meta
Total, de 15 milfamilias. previapara o Programa C#4da do Terra, aida nopresente ano-
Como manifestado ameriormeme, reirero que as mesmas regrar de
financiamenro aprovadas pora o Progrwn
Banco da Terra, serdo aplicaday na
consolidagdodo seu programapiloto - Cidaa da Tera asscgwwdo assim as me
cond45es de smsentabilidade conquiadas para o ualp rograma. Tais con*&es es
sendo estendzas, reoarvame,
para os fixancuanentos de aqw4siffo de terras jf
realizadasno ambi:odo ProgramaCida do Terra
AoScnhor
GOBtVD NANK4NI
Dir
do Banco M&wdiaTnoBxauil
Cbrparaee%izncal Centr 7.7Z2 95W - Bamxia/DF
SCN- Qd. 2 - Lote 4 - Ed.
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ot oportwo,' bifornno,Wd4 quo recwsos de otro de Cwesrhmente
cuaejo disponis para as bmfcidrios da reforma agrdia atrav* do Proznwa de
Forralecimentoda .pgriculira Fmaliar - PRONW, anbam eo disponfs. cm
iguadade de cond4a, aas beneflgrls do Progrma Cddidada Terra,come esobekce o
d'nl
Operadonad do refaridoprovrama
Ccrtodo pkno dto do Prowama Cdk dad Toma,ranfco mm dmuto
quamo a Imporrdniadoprorzmapwwa mflhaws defwlias qe, sem Oqual adotrlanwa
oporiasdade deprodwlr, urado da terrao seu sustendoe gerondo mp-ego c renda pap
as cos
ende vive.
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Unofficial Translation
Cabinet of the Extraordinary State Minister for Land Policy
Brasilia,November 10 1999
Mr. Director:
I would like to take this opportunityto inform you that we have been authorizedto disburse an additional
R$55.55 million, part of the remaining balance of the loan agreementbetween the World Bank (IBRD)
and the Brazilian government,in order to finance basic infrastructure investmentsfor families in the
States of Maranhao, Ceari, Pernambuco,Bahia and Northern Minas Gerais, to be assisted under the
Cedulada TerraProgram(asthe BrazilLandReformand PovertyAlleviationPilotProjectis knownin
Brazil).
This authorization is being given at the same time that we have committedapproximatelyanother R$40
million from the Banco da Terra (Land Fund) in order to ensure needed Brazilian government counterpart
funds for the financingof land acquisitions, in accordance with the above referencedloan agreement with
the World Bank.
These two amountswill guarantee assistance to more than 10 thousand families who, when added to the 8
thousand already assisted, will bring the total, already this year, to 18 thousandfamilies (assisted by the
program), exceeding,therefore, the total goal of 15 thousand families, projectedfor the Cedula da Terra
Program.
As mentioned in the past, I would like to reiterate that the same financing rules approved for the Banco da
Terra Program, will be applied in the consolidation of the Cedula da Terra Program,thus assuring the
same sustainabilityconditionsearned for the current (Banco da Terra) program. Said conditions are
being extended, retroactively,for the financing of land acquisitions already realized under Cedula da
Terra Program.
At this time, I would also like to inform you that the credit for investment and crop finance which are
available for the beneficiaries of agrarian reform through the National Programto Strengthen Family
Agriculture - PRONAF,are also available, under the same conditions, to the beneficiariesof the Cedula
da Terra Program, as established in the Operational Manual of the aforementionedproject.
Certain of the full success of the Cedula da Terra Program, I ratified my enthusiasmon the importance of
the project to thousands of families, without which, they would not have the opportunityto produce, take
their sustenance from the land, and generate income and jobs in the communitieswhere they live.
Attentively,
signed
Raul BelensJungmann Pinto
ExtraordinaryState Minister
for Land Policy
To: Mr. GobindNankani
World Bank Director - Brazil
ANNEX E: Management Response to First Request for Inspection
MANAGEMENT RESPONSE TO
REQUEST FOR INSPECTION PANEL REVIEW OF
BRAZIL: LAND REFORM AND POVERTY ALLEVIATION PILOT PROJECT
LOAN 4147-BR
Managementhas reviewed the Request for Inspection of the Brazil Land Reform
and Poverty AlleviationPilot Project, filed on December 10, 1998 and the separate letter
dated December21, 1998. The followingResponse has been prepared by Management.
Contents
Chapter
I
II
III
IV
V
Introduction ....................................
The Bank's Involvement in Land Reform in Brazil
and Loan 4147-BR
.3
The Nature of the Request and Some Considerations
on Its Eligibiity
.6
Response to Claims of Adverse Impact of the Project
and Violations of Bank Policies and Procedures ..................................
Conclusions..................................
ANNEX A:
ANNEX B:
ANNEX C:
ANNEX D:
Matrix of the Request for Inspection and Management Response
Project Supervision and Improvements Introduced
Project Studies Undertaken
Beneficiary and Official Support for the Project
1
8
24
Abbreviations Used in this Document
ABRA
BNB BNDES
BP
CAS
CdaT
CMU
CONTAG
ERR
FAO
GP
INCRA
InfoShop
MST
NGO
OD
OP
PROCERA
QAG
RS
STU
TDA
TJLP
Brazilian Agrarian Reform Association
Bank of the Northeast of Brazil
National Development Bank
Best Practice
Country Assistance Strategy
Cedula da Terra (the Project)
Country Management Unit (of the World Bank)
National Confederation of Agricultural Workers
Economic Rate of Return
Food and Agriculture Organization
Good Practice
National Institute for Colonization and Agrarian Reform
World Bank Public Information Center
Movement of the Landless
Non-Governmental Organization
Operational Directive
Operational Policy
Credit Program for Land Reform Beneficiaries
Quality Assurance Group
Brazilian Real (Currency)
State Technical Units
Government Agrarian Reform Compensation Bond
Long Term Interest Rate
Chapter I: Introduction
1.1
The Request for Inspection concems the Brazil Land Reform and Poverty
Alleviation Pilot Project, financed in part by Loan 4147-BR, for $90 million, which was
approved by the Bank's Board on April 22, 1997 and became effective on September 12,
1997. This was the first market-based land reform operation approved after a Board
Seminar in July 1996that had discussedthe benefits of this approach. For this reason, and
because of its innovative aspects, the Project was considered under Regular Procedures
(i.e., full discussion)at the requestof one ExecutiveDirector.'
1.2. The Project is testing a market-basedland reform mechanism wherebybeneficiary
associations obtain financing to purchase agricultural properties which they judge to be
suitable and for which they negotiate directly with willing sellers. It seeks to benefit
15,000 poor rural families in Northeast Brazil. Implementation, originally planned for
three years, is far ahead of schedule: some 8,000 families have already receivedland and
titles, the remaining 7,000 have negotiated land purchases and will receive loans shortly,
and the demand for Project support has been so strong that another 28,000 families are
currently waiting for approval of pending proposals. Pre-project economic analysis,
supported by case studies of actual properties and on-farm investment activities,-suggests
that the Project is leading to substantial increases in beneficiary incomes. The Brazilian
Government wishes to expandthe pilot and to involve other states within and outsidethe
Northeast. Management assessesthat this expansion is well justified by the results to date,
and preparation work is advanced for an Adaptable Program Loan. The Brazil pilot
Project is also attracting strong interest from other countries, both in Latin America and
other regions. The Bank is facilitating cross-country disseminationof results, with similar
projects under preparationin Latin America, Africa and Asia.
1.3. The Request, as defined by the Inspection Panel in the Notice of Registration,is
dated December 10, 1998. The Requestors argue on philosophical groundsthat "punitive
expropriation,'2 is the only legitimatemeans for achieving land reform in Brazil. For that
reason, they do not seek improvementsin the design or execution of the Project;they wish
to stop the pilot and any contemplatedexpansion. The Request does not referto violations
of specific Bank policies or procedures, but makes a number of general claims which are
cited in the Notice of Registration: (a) the Project is not achieving its objectives;(b) the
Project is not being implementedas a pilot; (c) beneficiaries will be unable to repay debts
entered into under the Project; (d) the Project will lead to increased prices of agricultural
land available to rural workers; (e) the Project is an alternative/substituteinstead of a
complement to Brazil's Constitutionally-mandatedland reform program; and (f) the Bank
failed to consult and adequatelyinform project-affectedpeople and their representatives.
The Project is part of the Bank's Rural Development Compact and was rated by the
Quality Assurance Group (QAG) as one of the two best-practice operationsin the Latin
America and Caribbean Regionin 1997, in terms of quality at entry.
2
See quotes in paragraph 3.1.
1.4. In a separate letter dated December 21. 1998 from one of the Requestors, it is
alleged that the Project violates ODs 4.15 (Poverty Reduction) and 4.01 (Environmental
Assessment), BP 17.50 (Disclosureof Operational Information), and GP 14.70 (Involving
Non-Governmental Organizationsin Bank-SupportedActivities). The Panel registered the
claims regarding OD 4.15 and BP 17.50. The Notice of Registrationmentions only the
December 10, 1998 Request signed by eight organizations and 853 individuals. We note
however, that in drafting its Notice of Registration the Panel has actually drawn material
from the December 21, 1998 letter as well. Management will address in this Responsethe
contents of both the Requestand the letter, and all claims of adverse impactsand violations
of Bank policies and procedures.
1.5. The ManagementResponseincludes the present Chapter I (Introduction);Chapter
II (The Bank's Involvementin Land Reform in Brazil and Loan 4147-BR); Chapter III
(The Nature of the Request and Some Considerations on its Eligibility); Chapter IV
(Response to the Claims of Adverse Project Impacts and Violations of Bank Policies and
Procedures); and Chapter V (Conclusions). These are followed by a series of supporting
Annexes; particularattentionis drawnto Annex A, which includes a Matrix of the Request
for Inspection and ManagementResponse. Finally, Management is also making available
for consultation by the Panel written materials it has received, including signatures, six
videotapes and three audio tapes,presenting directly the views of several thousandProject
participants and indicating,more eloquently than any Bank report could ever hope to do,
their knowledge of, participationin, commitment to, and deepest hopes for the success of
the Brazil Land Reformand Poverty Alleviation Pilot Project.
a
Chapter II: The Bank's Involvement in Land Reform
in Brazil and Loan 4147-BR
The Context: Bank Involvement in Land Reform Issues in Brazil
2.1
Management concurs fully with the Requestors that unequal access to land assets is
one of the root causes of rural poverty in Brazil. As such, efforts to address land issues
deserve high priority and the full support of the Brazilian Govemment and intemational
partners like the WorldBank. However,Management disagreeswith the Requestors'position
that the only legitimatemeansto pursue land reform is through "punitive expropriation."
2.2
The Bank has sustained a long-term partnership with the Brazilian Governmentto
address income and human development issues in the Northeast of Brazil, the region
containing the largest concentrationof rural poor in Latin America. Land issueshave figured
prominently in this agenda. In the early 1970s, the Bank launched a major collaborative
research undertaking with local institutions to develop an analyticaldata base and identify the
main causes of poverty in the Northeast. An interim Bank report in 1975 (Rural
Development: Issues and Options in Northeast Brazil, Report No. 665a-BR) and the final
published research study in 1981 (The Agricultural Economy of Northeast Brazil, Johns
Hopkins University Press) clearly linked excessive land concentration to rural poverty.
Recommendations urged rapid initiation of land redistribution. In response, under various
rural development projects the Bank supported the establishment/strengtheningof State Land
Institutes, settlement and land titling activities. In the late 1970s,the Bank-financedParnaiba
Valley Development Project in the State of Piaui (Loan 2015-BR) included purchaseof about
200,000 ha of land for redistributionby the Govermment,with active participationof rural
syndicates. In 1985, the Bank financed a larger-scale regional program (Loan 2593-BR) to
prepare a technical cadaster, acquire lands and settle families, and strengthenthe State Land
Institutes in nine Northeast states and northern Minas Gerais. Around 900,000 ha were
acquired through purchase and expropriation for settlement. While some of these efforts of
the 1970s and 1980s were successful, there were also many weaknesses. The Bank and the
Government continued to search for more efficient and effective instrumentsto addresswhat
remained a very serious land distribution issue.
2.4
Since the early 1990s, a shift towards demand-driven community-baseddevelopment
programs generally in the Northeast (v. state-administeredefforts through publicinstitutions)
has yielded significant results. Emerging lessons began to influence thinking as well on new
ways to tackle land issues. The 1995 Brazil Poverty Assessment (Report No. 14323-BR)
contributed to the debate, suggesting that stabilization, falling land prices and low inflation
were creating an environment in which promotion of efficient land markets could improve
access of the poor to land as an importantanti-poverty instrument. Meanwhile,reflecting on
worldwide experience, a 1996 Bank Land Policies Paper reviewed the costs, inefficiencyand
conflictive nature of administrative instruments (expropriation, land purchases and re-
4
distribution by governments)to achieve land reform. and recommended experimentingwith
market-based mechanisms. A Board Seminar on this paper generally endorsedthe findings.
2.5
In 1996,the Bank and the Brazilian Government decided that the time was ripe to try a
new approach to land redistribution. To seize the moment and act quickly,a small component
was developed within the ongoing Ceara Rural Poverty Alleviation Project (Loan 3918-BR).
The State governmentsupporteda land acquisitionprogram led directly by rural communities,
benefiting about 700 families,with complementaryon-farm investmentsfinancedthrough the
community-based developmentportion of the Project. Community responseto the experiment
was extremely enthusiastic; it was executed rapidly and at relatively low cost compared to
traditional expropriation and other state-administered methods of land reformn. The State
reported that about the same number of families obtained access to land in only a 12-month
period, as had over the previous two decades. These findings prompted the Federal
Government to seek Bank support for a broader pilot in five Northeast states. The Bank
agreed, and the June 1997 CAS for Brazil and CAS Update of May 1998cite communityand
market-based approachesto land redistributionand rural infrastructureas key elementsof the
Bank's rural poverty strategy.
Brazil Land Reform and PovertyAlleviation Pilot Project (Loan 4147-BR)
2.6
The Land Reformand Poverty Alleviation Pilot Project (Loan4147-BR; $90 million),
known in Brazil as Cedula da Terra (CdaT), was approved by the Board on April 22, 1997
and became effective September 12, 1997. Following on the successful Ceara experiment
(para. 2.5), the Project targets poor rural laborers and farmers who are either landlessor have
insufficient land for subsistence, in the Northeast states of Bahia, Ceara, Maranhao,
Pernambuco and Minas Gerais. The Project seeks to increase the incomes of 15,000 such
families by assisting them to purchaseland and obtain complementaryinvestmentsto raise the
productivity and output of the propertiesthey acquire.
2.7
The Project is completely demand driven, with the government facilitating and
assisting decisions made by rural laborers and farmers organized into community
associations.
*
The association searches for suitable land, negotiates a purchase with willing sellers,
presents the proposed purchaseto the State Land Institute and requests confirmationthat
the title to the land is clear and no other conditions threaten the transaction,and that the
negotiated price is consistentwith market conditions.
*
The community then presents its land purchase proposal to the State TechnicalUnit (STU)
of the State Rural Poverty AlleviationProject, which verifies beneficiaryeligibility.
*
Upon clearance by the STU, the community receives a loan, funded by Federal
Government budget resources and administered by the Bank of the Northeast, and
completes the transaction with the property seller. The association members decide how
to divide the land among themselves and each individual's correspondingrepayment
obligation.
* The community associationalso presents to the STU proposals for complementarysubProjects and technical assistance to help members establish themselves on the property
and improve its productivityand output. Typical community subprojectsinclude physical
and social infrastructure,productive facilities and equipment. Communitylabor and land
constitute the counterpartcontribution.
* The State govenmmentauthorizesthe transfer of funds for the sub-projectsdirectly from
the State sub-accountsof the Loan 41>47-BRSpecial Account at the Bank of Brazil, to the
account held by the community association, which can then draw the resources to
implement the sub-projects.
2.8
Project implementation,originallyplanned to benefit 15,000 familiesover three years,
is running well ahead of schedule. At end-January 1999, some 8,000 familieshad already
received land and titles to a total of 204,000 ha, or about 25 ha per family. The remaining
7,000 families have negotiated land purchases and will receive loans shortly. Demand is
running far ahead of the Project, with another 28,000 families currently in the queue for
approval of purchase proposals totaling about 808,000 ha. The Federal Government has
advanced financing for land purchases (which it had expected to provide only in the final 18
months of the Project) to maintainthe rapid pace of execution set by the beneficiaries. Bankfinanced sub-project investments are also now moving rapidly after initial delays, as STUs
adjusted to the sheer volume of investment proposals from the communityassociations.The
Bank has disbursed $29 million of Loan 4147-BR, and an additional $12 million is in the
pipeline for which the Governmentwill soon be requesting reimbursement.With the recent
approval of the 1999 Federal Govemment budget, it is expected that the Project will be
completed relatively quickly. The first 18 months of implementationhas been an important
period of learning, and the findings are discussed in Chapter IV. The immediate lesson,
though, is that the clients of agrarian reform - landless rural families - strongly desire rapid
access to land in a participatoryand non-conflictive manner.
2.9
In the face of extraordinarydemand for access to the Cedula da Terra program, the
Brazilian Government wishesto expand the pilot Project on a much larger scale and involve
other states outside the Northeast. Based on results of the pilot, Managementassesses that
the Bank should support Brazil in expanding the program, and processing is well advanced
for an Adaptable Program Loan. The APL was ready for appraisal and negotiationswhen the
Request was received. In the circumstances,processing has been halted pending Panel and
Board consideration of the merits of the Request. However, while the Government
understands the reason for this delay, it is causing anxiety on the part of communitieswhich
have made the effort to organize and identify properties, and are awaiting the resources to be
able to proceed.
6
Chapter III: The Nature of the Request and
Some Considerationson Its Eligibility
Nature of the Request
Management considers that the Request is essentially an effort to present a
3.1
philosophical position with respect to land reform. The basic thesis of the Requestis that
"punitive expropriation" is the only just and constitutionally sanctioned approachto land
reform in Brazil. The Requestorsare not seeking to improve the design or executionof the
Project or proposing changes to help ensure better compliance with Bank policies and
procedures. The objective is to stop the operation and any contemplated expansion,
because the Requestors do not believe that the Govermnent should be pursuing a
voluntary, market-basedapproachto achieve redistribution of land assets in Brazil.
"Expropriation means punishing (in accordance with current legislation)the owners
of large tracts of land who keep them in unproductive state and/orfail to fulfill the
socialfunction stipulated in the country's Constitution." (Source. the Request)
"The central motivation for our condemnation of the pretense of 'market-based
agrarian reform' is not based on its burdensome means for transferring land to
settlers: rather we are defending, in the Brazilian case, expropriationand resulting
redistributionfor thepurposes of land reform...as the best way to repair the moral and
ethical deviations which have generally characterized the history of private land
ownership in Brazil. " (Source:Supplemental letter to the Request)
3.2
Management accepts the legitimacyof other viewpoints regardingland reform, and
recognizes this to be a highly emotive subject of debate in Brazil. It does not suggest that
the approach piloted under Loan 4147-BR should supplant all other land reform
instruments available to the BrazilianGovernment. It does believe, however,that it would
be iriiprudent for a country with estimates ranging between 1.0 and 2.5 million landless
farmiliesliving in acute rural poverty not to be actively testing alternativemeans to achieve
swift and cost-effective changesin the distribution of land assets.
3.3
Bank staff and Managementhave attempted to engage in discussionproponents of
what might be described as the "expropriation only" approach but, as with many other
disputes founded on philosophicalconsiderations, it is not always possible to bridge the
void through informationand facts. The following excerpt from a letter from the President
of the Brazilian Agrarian ReformAssociation, one of the organizationalsignatoriesof the
Request, to a Bank staff member in February 1999 reflects the tenor of some of these
exchanges.
"If the Federal Governmentwishes to have a dialogue on land reformit must withdraw
from the agenda and from its land strategy 'market-based land reform'. On this we
have nothing to say or discuss:we are totally opposed... The WorldBank knows...that it
has intentionally entered into a national (even an international) strategic debate...the
World Bank has enough wisdomto understand the scope and delicacy of this theme and
the international repercussionswhich it will incur if it persists with thisfinancing."
7
Some Considerations on the Eligibility of the Request
3.4
Contrary to the requirements set forth in the Inspection Panel Resolution and
Operating Procedures,3 the Request does not demonstrate actual or potential harm to
Project beneficiaries. The sum and substance of the Requestors' complaint goes to a
policy choice of the Brazilian Government in the area of land reform, rather than to the
proper application by the Bank of its own policies and procedures. Moreover, it is
Management's view that the Requestors themselves do not meet the eligibilitycriteria to
file a Request for Inspection.
3.5
Of all signatories of the Request identifiable by name, organization, locationand
national identity number,none is a Project beneficiary. Also, there is no evidencethat any
beneficiaries designated the Requestors to act as their agents in presenting the Request.
The large majority (more than 80%) of the Requestors are from outside the Northeast,and
only 4.8% are from States where the Project is being implemented. At least 25% of the
Requestors are Federal employees, mainly of INCRA, the Federal entity historically
responsible for expropriation(the approach to land reform advocated by the Requestors)
and currently a part of the Ministry of Agrarian Reform, which in turn is the implementing
agency for Loan 4147-BR at the Federal level.
3.6
In significant contrast, Management is making available for consultationby the
Inspection Panel materials it has received from participating States, including more than
6,000 signatures and other documents, six videotapes and three audio tapes, from actual
and potential beneficiaries and community associations, concerning all aspects of the
Project. Some of these materials pre-date the Request and are thereforenot.a reactionto it.
Overall, they testify to the participants' belief in the Cedula da Terra, their understanding
of what it involves in terms of financial and other commitments, the benefits they believe
they will achieve through the Project, the harm which stopping the program/Projectwould
cause, their preference for obtaining land through non-conflictive means rather than
through invasion as has been encouragedby some of the Requestors, and the fact that these
beneficiary associations have not asked anybody to represent them in a Requestor related
letter to the Bank, nor have they been consulted about such a Requestor letter.
3.7
Management understandsthat the Panel could not have discernedthe breakdownof
the Requestors or the extent to which they do or do not represent the Project beneficiaries
for the purposes of the Request. It considers, however, that if this informationhad been
available to the Panel, the Request would not have qualified for registration and is not
eligible for inspection.
Inspection Panel Resolution: IBRD Resolution 93-10 and IDA Resolution93-6 of
September 22, 1993. OperatingProcedures, adopted by the Panel on August 19, 1994.
3
ChapterIV: Response to the Claims of Adverse Project Impacts
and Violationsof Bank Policies and Procedures
4.1
The Request of December 10, 1998, and the separate letter of December 21. 1998.
make ten claims of adverse Project impacts and violations of Bank policies and
procedures. The Request itself presents six general claims of adverse Project impacts
without referring to any specific Bank policies or procedures (para. 1.3). The separate
letter reiterates these points and also alleges four violations of specific policies and
procedures, of which the Notice of Registration registers two (OD 4.15 and BP 17.50;
para. 1.4). In the interestsof transparency,Management will respond to all claims. At the
same time, however, we wish to make clear at the outset that we disagree that there have
been any adverse impacts or that any Bank policies or procedures have been violated.
Moreover, Managementbelievesthat none of the claims is substantiated.
4.2
As some claims are closely related, Management has re-grouped them into the
following four clusters for the purposes of this Response, indicating in each case whether
the point originatesin the Request(R) or the separate letter (SL).
Cluster (a): claimsconcerningthe Project's contributionto poverty reductionand
its current or potentialimpact on participants' income and welfare
1.
2.
3.
4.
the Project violates OD 4.15 on Poverty Reduction (SL)
beneficiarieswill be unable to repay debts entered into under the Project (R)
the Projectis not achievingits objectives(R)
the Projectwill lead to increases in the prices of agricultural land (R)
Cluster (b): claims concerning the pilot nature of the Project, whether a marketbased approach is crowding out expropriation as a means to redistribute land
assets, and about the constitutionalityof this approachto land reformin Brazil
5. the Project is not being implementedas a pilot (R)
6. the Project is an alternative/substituteinstead of a complementto Brazil's
constitutionally-mandatedland reform (R)
Cluster (c): a claim concerningenvironmentalassessments:
7. the Projectviolates OD 4.01 on Environmental Assessment(SL)
Cluster (d): claims concerning consultation, disclosure of information and NGO
participation:
8. the Bank failed to consult and adequately inform Project-affectedpeople
and their representatives(R)
9. the Project violates BP17.50 on Disclosure of OperationalInformation(SL)
10. the Project violates GP 14.70 on involving Non-GovernmentalOrganizations
in Bank-supportedActivities (SL)
10
* The Project finances the creation and improvement of productive assets. and cost
recovery and sustainabilityare features of the Project design.
* Detailed economic analysis was undertaken, which demonstrates that the Project will
have a strong positive impact on the poor and that economic and financial returns
would remain robust under various scenarios.
*
The Project employs systematicmonitoring and comprehensive evaluation,combined
with regular, well-conceivedand executed supervision and follow-up.
4.5
Claim No. 2: BeneficiariesWill Be Unable to Repay Debts Entered into under
The Project. As mentionedin para. 4.4 above, detailed economic and financialanalyses
of expected Project impacts were carried out during Project preparation. Based on field
visits by experienced local consultants, four typical farm models were developed for
different sub-regions of the Northeast, taking into account the likely low level of
capitalization, formal training and management skills of Project beneficiaries. The main
finding was that family farming units would not only be viable, but that incomes of
beneficiaries would increase significantly, even after netting out repaymentobligations
incurred under the Project. Sensitivityanalysis (inter alia for possible payment of inflated
land prices, higher than estimatedwithout-project family incomes and simpler production
systems than those used in the farm models) established a very high degree of robustness
of the expected economicand financialreturns.
4.6
Economic Rate of Return(ERR). The expected ERR for the overall pilot Project
is 32%, ranging from 26% in semi-arid areas to 75% in peri-urban locations. Details of the
analyses are provided in the ProjectAppraisal Document.
4.7
Financial Viability. Perhaps the more relevant question, from the standpoint of
the Requestors, concerns the expected financial viability of the Project at the level of
individuals and the communityassociations. Overall, the pre-Project analyses indicated
very good prospects for financial sustainability. There are several reasons.why this is
indeed likely, despite the fact that many settlements created under traditional land
distribution programs are still strugglingto survive financially.
(i)
The Project depends on beneficiary initiative and selection of lands they want to
buy. This results in a positive selectionbias in favor of rural landlessfamilies with
initiative. It also meansthe lands selected are often among the best available in the
area and are suitable for production systems compatible with beneficiaries' own
experience and skills. In contrast, expropriated lands must be unproductive/
underutilized, and are often of poorer quality.
(ii)
Project beneficiaries have immediate access to matching grant resources for
complementary investments (housing, small-scale irrigation schemes,etc.). These
funds, which include initial start-up support of US$1,300 equivalentper family, are
critical for the initial capitalization of new farmers and allow beneficiaries to
immediately make productive use of their newly acquired properties. The separate
ii
letter following the Request criticizes access to these matching grants for unclear
reasons, but they are actually an important design feature of the Project aimed at
reducing beneficiaries' dependence on continuing Government support.
Comparable investments in traditional administered settlement schemes on
expropriated properties typically depend on lengthy budget approval mechanisms
and are thereforeoften inadequateor significantly delayed.
(iii) The Project includes funds with which beneficiaries can themselves contract
technical assistance, which assures rapid and effective delivery of technical
services. Beneficiariestend to select technicians they feel will produceresults for
them and, if they are not satisfied,have the freedom to make changes.In contrast,
public extension and other technical services typically neglect smallholders,and
farmers have little choiceabout the agent assigned to serve them.
A number of evaluation studies of the Project have been conducted throughout
4.8
1998, among them detailed case studies on subprojects in Bahia and Ceara, which have
focused on the question of financial viability (paras. 4.12-4.14). In line with the pilot
approach of this Project, some minor adjustments to project design, includingthe financial
terms of the loans for land purchase,are being made on the basis of the findingsfrom the
studies.
Conditions of Land Purchase Financing. With respect to land purchase
4.9
financing, this Project componentis financed entirely by the Federal Government,which
provides loans to communityassociationsto acquire the lands they have selected(para. 2.7
summarizes the arrangements). Initially, the terms of the Cedula da Terra (CdaT) loans
were forl0 years, including a three-year grace period, at a positive real interest rate with
constant amortization determinedby the Brazilian Development Bank (BNDES)based on
its average cost of long-term borrowing (TJLP). At the time of Project appraisal in
January 1997, the TJLP was 11% in nominal terms and inflation was 8%, yielding a real
interest rate of 3%. This rate was the basis for the economic and financial modelingdone
at Project appraisal. Sinceall land loans have a three-year grace period, the first payments
were not due until 2001.
4.10 As a result of stabilization efforts in Brazil, inflation fell to 2% in 1998 and the
TJLP rose to about 12% for most of the year, yielding a real interest rate of 10%. In
December 1998, the TJLP rose to just over 18%, and has since declined againto 12.8%. If
the exceptionally high December 1998 rate were to persist over a long period, some
beneficiaries in areas with less favorable agro-climatic conditions would experience
repayment difficulties. The Federal Ministry of Land Reform monitored this situation
throughout last year, taking into account the findings of case studies carried out as part of
the Project. In December 1998,the Ministry decided on changes in the financingterms for
land purchase. In accordance with Complementary Law No. 93, CdaT beneficiaries
would be able to refinance their loans retroactively, with the new terms which include a
20-year repayment period with three years of grace, and a fixed interest rate of 4%. With
these new terms, annual repayments would be about R$400. The retroactive adjustments
would be made before the first payments of any Project beneficiaries fall due.
4.11 The Request mentions projections of per family annual revenues. cash flow and
debt service projections, which Management is unable to reconstruct or interpret. The
projection of R$410 of per family annual revenues mentioned in the Request is
significantly below any realistic expectations, even for the most disadvantaged
commnunities.The typical production system observed among beneficiarieson the 30-50
ha family plots under the Project in these areas includes livestock (mainly goats), fodder
crops, some lower-valuesubsistencecrops (beans, corn, manioc) and a small area of higher
value products for saledependingon the location (sweet potatoes, cashew and others). The
resulting net cash flow would range from R$1,000 after two years of Project
imnplementation,to R$3,300 after five years. It bears repeating that these are the expected
results in the least favorable areas; results in areas with better agro-climaticconditions
would be considerablyhigher.
4.12 Case Studies and Supervision Findings of Actual Results. In 1998, FAO
conducted case studies of several CdaT community associationsin the Statesof Ceara and
Bahia, where Project implementationwas most advanced. The purpose was to verify the
economic and financial viability of the pre-Project assumptions, based on the experiences
of ongoing sub-projects,with special attention to the more difficultsemi-aridzones of both
States. The case studies are based on field visits to a large number of sub-projects. In
Ceara, these included sub-projectsfinanced under the earlier experimentalcomponent of
the Ceara Rural Development and Poverty Alleviation Project (para. 2.5), which have
existed longer and thus allow for a better evaluation of actual v. potential financial
viability.
4.13 Box I summarizesthe results of the FAO case studies. Overall, they confirm the
likely economic and financial viability of most sub-projects. For sub-projectsin more
favorable agro-climaticzones, the actual financial returns greatly exceed projectionsmade
during Project preparation. For those in the least favorable semi-arid zone of Ceara,
profitability is somewhatless than estimated at appraisal. These findings were taken into
accotint by the Ministry of Agrarian Reform, in designing adjustments to the financial
terms for the CdaT program in December 1998 (para. 4.10). With the revised.financial
terms, sub-projects in the semi-arid should be financially viable, particularly if they have
access to water, which is also a criterion used by the STUs for land-purchaseapproval in
semi-arid zones.
13
Box 1: Results of Case Studies of Financial Viability
of Ongoing Cedula da Terra SubProjects
Coastal Zone of Ceara: Beneficiariesare producing coconuts, cashew and livestock,and will achieve
annual family incomesof R$5,000-6,000in Year 3, eliminating any doubt as to their financialviabilitvand
capacity to pay annual installmentson land purchase loans under current CdaT terms.
Coastal Highlands of Ceara (Serra): Beneficiariestypically produce vegetablesand fruit (bananas).
Depending on skills, estimatedfamily incomes range from RS1,500to R$3,200 in cash. Other sub-Projects
visited in the same region have potentiallyhigher retums. Even in the worst cases, family incomesshould be
sufficient to pay land purchase loans.
Semi-arid Zone of Ceara: This is the most difficult area, typically with subsistence production systems
(beans, com, manioc), some livestock(mainly goats, but occasionally cattle as well), and some higher value
crops in relatively small irrigatedareas. With normal rainfall, family incomes would reach about RS2,500in
Year 3 and RS3,500-4,000 in Year 10, but a significant share of this income is in the form of on-farm
consumption. Without irrigation,cash income would range from only RS650-2,300,and with very limited
irrigation from RS 1,600-5,000. The only beneficiarieswho would potentiallybe unable to meet paymentsin
years of drought would be those with no irrigation. Therefore increasingemphasis must be put on ensuring
that all beneficiaries in this zone have access to irrigation, and that CdaT avoid approving land.purchases
where no irrigation is available, unless it can be put into place quickly through complementaryinvestmnents.
Northern Coast of Bahia. Typical production systems include coconut, fruits and livestock, and family
incomes are expected to reach RS10,000after five years and R520,000 after ten years, leavingno doubt as to
capacity to repay land purchase loans. (Surprisingly, per family costs of land in this area have not been
significantly higher than in other areas.)
Cacao Region of Bahia. Annual family incomes will range from RS2,000-S,000in Year 3 and RS4,0008,000 in Year 10, depending on climatic conditions. Sufficient cash incomeshould be availableto repay land
purchase loans. Expected financial outcomes in the extreme South of Bahia are similar to, or marginally
better than, those in the cacao region.
Semi-arid Region of Bahia. Productionsystems are similar to those in the semi-arid zone of Ceara (beans,
corn, manioc and livestock), although access to irrigation is much better. Family incomes are expected to
reach R$ 1,700 in drought years, and RS4,300 in years of normal rainfall, which should be adequateto make
annual land purchase payments:
4.14 As the Project is being intensively supervised and there has been exceptional
interest in it (including by government teams from other countries), Bank staff and
consultants have visited the field frequently. They typically find that community
associations have a clear idea of the production systems they will implement, appropriate
to the natural, human and financial resources available to them. In many cases,
associations have purchased land that they earlier rented or sharecropped, and therefore
have a very good notion of its production potential. In other cases, they have purchased
lands that were under production but have recently been semi-abandoned(for example,
coconut, cacao and bananas),and therefore allow for rapid cash returns. Most associations
understand their repayment obligations and express the expectation of being able to
comply. Even more impressive, some communities have already been able to accumulate
14
savings towards repayment.and some are inquiring about the possibility of prepaymentto
shorten amortizationperiods and total interest payments.:'
4.15 Quality of Land Sold under the Market-based Approach. The Requestclaims
that most land purchased by rural workers and subsistence farmers under the Project is of
the poorest quality. In fact, all evidence suggests that although lands have been acquired
under the Project at lower than expropriatedland prices. they are generallyof good quality.
Project beneficiaries may be poor and under-educated, but they have worked the land all
their lives as subsistence farmers or laborers, and are unlikely to select a poor quality
property to purchase, knowing, as they do, that their ability to repay their land loan
depends on its productivity. It is possible that some groups prefer to remain in an area
long familiar to them rather than move, in which case they may purchase a propertywith
more limited natural resources,but this is not very common. The general experiencethus
far is that communitiesbuy good quality lands, even if they have to relocate.
4.16 To date, there are no known cases of clear sub-project failure, althoughit would be
unrealistic to assume that this will never happen at either the individual or association
level. In the event that individuals fail in their commitments, the Project Operational
Manual defines clear proceduresfor substitution of community members.
4.17 Access to PROCERACredit. In claiming violation of OD 4.15, the Requestalso
asserts that Project beneficiaries will not be able to finance their start-up productive
activities through PROCERA (a special credit line for land reform, established in June
1986 to complement the National Agrarian Reform Program of October 10, 1985). This is
not the case. CdaT beneficiaries became eligible for PROCERA credit through INCRA
Decree 567 of November 20, 1998. To date, no Project participants have received
PROCERA credit because the authorizing decree became effective only in late 1998.
According to INCRA's PROCERACoordinator, it normally takes two years from the time
of formal settlement on a land reform plot, even for beneficiaries of traditional land reform
schemes, to access PROCERA. Project beneficiaries do receive communityinvestments
and start-up grants, and therefore have support during the installment period. While access
to credit after this initial period is important, and the Project financial projections do
indeed assume some credit access, the heavily subsidized terms of the PROCERA line are
not essential for financialviability.
4.18 Financial Obligations of Recipients of Expropriated Lands under Traditional
Land Reform Schemes. Finally, Management wishes to point out that the Request
conveys a misleading impressionthat beneficiaries of expropriation processesreceivetheir
lands free of charge in Brazil. Article 25 of the Estatuto da Terra (National Land Statute)
states that expropriated land should be sold, not provided free, and Article 81 of the same
law establishes a repayment period of 20 years at an annual interest rate of 6%. Once a
project is considered "emancipated"(sufficiently viable to transfer responsibilityand titles
All of the financialand economicanalysisdoneon the basisof pre-Projectmodels,those
completedin 1998and basedonactualpropertiesand crop patterns,as wellas the detailedanalyses
of capacityto meet landpurchaserepaymentobligationsin the six mainsub-regionsof the Project
area, are availableto the Panelon request.
15
to the participants). beneficiaries are legally required to pay the cost of land plus
investments made. In practice, few schemes actually been ' emancipated", but when this
occurs the participants will have higher obligations than do the Project beneficiaries,due to
the difference in terms and the inclusionof investments in the loans to be repaid.
4.19 Claim No. 3: The Project Is Not Achieving Its Objectives. The bbjectiveof the
pilot Project is to help reduce rural poverty and test a market-based land reform
mechanism, whereby beneficiary associations would obtain financing to purchase and
establish agricultural properties which they judge to be suitable, and for which they
negotiate directly with willing sellers. Community response to the pilot has been
exceptionally favorable, and implementationis running ahead of schedule. As indicated
earlier, 15,000 rural familieswere to have been settled over a three-year period, using this
mechanism. In less than 18 months, 8,000 families have already receivedland and titles,
7,000 have already negotiated land purchases and will receive loans shortly, and 28,000
farnilies are organized into community associations and have selected properties which
they wish to purchase. The only thing holding back these 28,000 families is lack of
resources, which the Brazilian Government is attempting to negotiate with the Bank
through an expansion of the pilot under an Adaptable Program Loan (paras. 1.2 and 2.9).
Case studies and intensivesupervisionconfirm good prospects for sustainabilityof the vast
majority of sub-projects,with no known failures to date.
4.20 Claim No. 4: The Project Will Lead to an Increase in the Prices of
Agricultural Land. The Notice of Registration indicates that the Requestors claim the
Project has increased the price of agricultural lands available for rural workers.In fact, the
actual claim in the Request is that the Project will lead to an increase in land prices in
future. Theoretically, the availability of land purchase financing should stimulate the
demand for land, and this could lead to increases in land prices. Whether this will occur in
practice depends on the price elasticity of land demand and supply, and on the scale of
Project-financed land purchases. Measuring this effect is complicatedby the large number
of simultaneous factors that influencethe land market over time.
4.21 All available data indicate that land prices in Brazil have been falling in recent
years, and have continued to do so even in States that are participatingin the pilot Project
(see Reydon and Plata, 1998). These falling prices are generally attributedto economic
stabilization and removal of agricultural subsidies following introductionof the Real Plan
in 1994. This trend could come to an end, or even be reversed, dependingon the evolution
of the current economic crisis in Brazil, but Management believes that price movements
would have little to do with the pilot Project because it is too small to exert a significant
influence on the market. In 1998, 221,428 ha were acquired in five Northeaststates. This
represents 0.3% of the agricultural land, and only a fraction of all land transactedin the
same year, in these states.
4.22 Although it is plarmed to expand the pilot, both within and outside the Northeast
region, it is unlikely that the area acquired in any one state and given year will exceed the
scale of the Project in the states where it was implemented in 1998. Moreover,discussions
with landowners and bankers in various states confirm the large stock of land held by
16
banks as collateral for defaulted farm debt or bx absentee-owners interested in selling.
Comparing the size of the land market and the scale of the project, it seems highly imlikely
that the pilot, or its expansion, would significantly affect the price of agricultural land.
Nonetheless, Management is aware of the theoretical potential for some impact and has
had this matter under considerationsince the earliest design stage of the Project. We will
continue to monitor the situation, and would certainly react to any clear indications that
land prices were increasing in response to Project activities. In particular, if the
concentration of Project activities in a small area seemed to be leading to local land price
increases, a conscious effort would be made to broaden the geographic scope of the project
in order to reduce this potentiallocal pressure on land prices.
Cluster (b): Claims about the Pilot Nature of the Project, about the
Constitutionalityof Pursuinga Market-basedApproachto Land
Reform in Brazil and Whether It Is Crowding out Expropriation
4.23 Claim No. 5: The Project Is Not Being Implemented as A Pilot. The
Requestors contend that the Project is not being implemented as a pilot and is being
expanded without proper evaluation (the latter point is not mentioned in the Notice of
Registration). Even if true, this claim about whether the Project is a pilot would notper se
be grounds for alleging harm to individual participants. Management in fact believes that
this Project exemplifies a successfulapproach to piloting. The Project was designedto test
a new methodology, with a limited number of targeted beneficiaries in five states (i.e., less
than the total number of Northeast states, but adequate to test the mechanism under
different conditions). Due to the huge demand for participation, the pilot is being
implemented much faster than originally planned, but it still accounts for less than 10% of
all land reform beneficiaries in 1998.
4.24 As this is a pilot Project, there has been intensive supervision, internationaland
national seminars, studies and workshops. The Project is being supervised with very
strong input from the field. In addition to formal supervision from Headquarters,Bank
staff in the Brasilia and Recife Offices have made some 18 visits to participating states
since the Project started. The Project has also been visited by the CMU Director and
discussed in three major seminars, with extensive participation by Governmentand the
Bank, the private sector, NGOs, academia, international specialists and representativesof
multilateral/bilateral organizations. There have been a number of workshopsinvolvingthe
STUs and the community associations of each state. As an example, the material which
Management is making available to the Panel includes a report and audio tapes of a
meeting of the presidents and some members of all the community associationsinvolvedin
the Project, in Bahia in November 1998. The findings and recommendations were
reviewed by the beneficiaries with State authoritiesand the Minister of AgrarianReform.
4.25 Field case studies and other studies on selected Project issues have been completed.
An ambitious evaluation exercise is underway, based on household interviews with
representative panels of Project beneficiaries, beneficiaries of traditional (expropriationbased) land redistribution, and non-beneficiaries.The following are some of the principal
17
lessons learned and adaptations that have been made to the pilot Project and are being
reflected in the design of an Adaptable Program Loan to support expansion of tlhepilot
(paras. 1.2 and 2.9).
* Landless rural familiesstrongly desire rapid access to land in a participatoryand nonconflictive manner.
*
The market-based approach piloted under the Project expedites the settlement of
landless rural families, with land acquisition - from identification to purchase typically taking less than 90 days.
*
Projected household incomes (five years after land acquisition) range from 3 to 10
times the pre-Project household income and permit these households to service their
land loans.
*
To date, communitieshave generally chosen good quality land at costs that represent
savings relative to traditional landreform and without upwardpressure on land prices.
*
Self-selection for Project participation has proven effective in targeting the landless
rural poor; the vast majority of beneficiaries have household incomes and
characteristics consistentwith the target population.
* The amount allocated to technical assistance was increased during land purchase and
subsequent production planning over the first three years after installation to help
ensure increases productivityand incomes.
3
*
The approval process for complementaryinvestment sub-projectshas been streamlined,
such that funds are immediatelydeposited with the community association following
land acquisition and disbursed once a sub-project proposal has been approved.
Heightened efforts are being made by the STUs to strengthen and better mobilizethose
community associations,which are newly formed under the Project.
* Financial conditions for the land loans are being retroactively adapted (to those of
Complementary Law 93, of 1998), with the repayment and grace periods increased to
20 and 4 years, respectively.
4.26 Claim No. 6: The Project Is an Alternative/Substitute Instead of A
Complement to Brazil's Constitutionally-Mandated Land Reform. The Request
questions the constitutionality of a market-based approach to achieve land reform,
suggesting that the Project somehow violates the Brazilian Constitution and related
legislation. Management understands that expropriation is only one of the land reform
instruments, which can be used in Brazil, and is satisfied that altemative approaches are
legally permissible. Managementdoes not disagree that expropriationis an importantand
nor does it expect that
necessary instrument at the dispositionof the Brazilian Govenmment,
I8
the market-based approach piloted under Loan 4147-BR would supplant all other land
reform instruments.
4.27 Constitutionalityllegalityof Alternatives to Expropriation. Propertv is one of
the fundamental rights guaranteed by Brazilian Constitution of 1988 (Article 5, XXII).
Nonetheless, the Constitution also provides that under certain and specific circumstances.
the Federal Government may expropriate land. Article 184 authorizes the Federal
Government to expropriatefor the purposes of agrarian reform:
"It falls under the Republic's authority to expropriate for social interest, for
purposes of agrarian reform, rural property which is not performing its social
function, againstprior andfair compensationin agrarian debt bonds (TDA)with a
clauseprovidingfor the maintenanceof real value and redeemablewithin a period
of up to twentyyears asfrom the secondyear of issue, and the use of which shall be
defined in law.
However, while Article 184 provides the legal discretion/authority for the Federal
Government to expropriate under certain conditions, it neither precludes other means to
achieve agrarian reform nor restricts the private purchase and sale of land. This
interpretation is supported by: (a) a specific legal opinion issued by the General Counsel
of the Brazilian Ministry of Land Reform; (b) the customary legal opinion which the
Bank receives from the Attorney General of the Ministry of Finance as a condition of
effectiveness, stating that the Loan Agreement is enforceable and in conformity with
Brazilian legislation; and (c) writings by respected Brazilian legal scholars (eg.,
Constitutional expert Dr. Jose Afonso da Silva, Curso do Direito ConstitucionalPositivo,
1992, in which he comments on Article 184 of the Constitution: "It does not mean that
land reform can only be done through this way [expropriation]"). Finally, the principal
land legislation of Brazil, the 1964 Land Statute, or Estatuto da Terra, clearly establishes
in its Title II (Land Reform), Chapter I (Objectives and Means to Access Rural Property),
Article 17 that:
"The access to ruralproperty shall be implemented through the distributionor
redistribution of land, through the execution of the following measures:
(a) expropriationfor social interest; (b) donation; (c) purchase and sale:
(d) gathering of vacant land;(e) (vetoed - this para. Dealt withpublic land illegally
occupied or explored by third parties); (j) inheritanceor bequest."
4.28 The Market-based Approach - Complementarity or Substitution of Other
Land Reform Instruments? Management has never suggested that the market-based
approach, which is being piloted under Loan 4147-BR, should supplant all other land
reform instruments in Brazil. It does believe, however, that it would be imprudent for a
country with estimates ranging between 1.0 and 2.5 million landless families living in
acute rural poverty not to be actively testing alternative means to achieve swift and costeffective changes in the distributionof land assets.
19
4.29 The concerns about substitution may have arisen because of the overwhelming
success of the pilot Project on the one hand, and the continuing high costs and limited
sustainability of traditional land reform on the other. The Table below shows the per
family cost of traditional land reform to be about twice as high as the market-based
approach being piloted under the Project.
Table: Per Family Cost of Market-based v. Traditional Land Reform (Rs)
Northeast
Admin.
______________
NPV Costs
Traditional
Market-based
Savings
$1,930
441
77%
Land
(including
Start-up
Money
Infrastructure
Total
improvements)
S6,578*
3,521
46%
$2,331
1,300
S2.407
3,258
S13,246
8,519
44%
-35%
36%
Initial Costs
Traditional
$2,941
$8,229*
$2,980
$3,193
Market-based
478
4,847
1,300
3,758
Savings
84%
41%
56%
-18%
* Excluding very significantcosts relatedto frequent judicial action.
Source: Project PAD, updated withmost recent informationin Project files.
$17,343
10,383
40%
4.30 In 1998, during which most of the approximately 8,000 families who have already
received lands and titles were processed, US$55 million equivalent, or 3.5% of total
expenditures spent by the Government on its traditional land reform program, were spent
in the Cedula da Terra program. The approved budget for 1999 includes R$30 million for
CdaT, or 2.1% of the total budget of R$ 1.4 billion allocated for the traditional land reform
program. At the same time, in the five participating Northeast states, the Project has
increased the overall number of families benefited by land reform under any approach,
rather than replaced the traditional approach. In 1997, the last year before effective Project
implementation, about 15,800 families were benefited in the Project states by traditional
land reform. This number remained at about 15,600 in 1998. The size of areas
expropriated also remained roughly constant: 521,800 ha in 1997 v. 508,300 ha in 1998.
At the national level, the traditional land reform program was significantly expanded over
the same period.
4.31 Finally, as a practical matter, the Project is likely to remain a complement to, rather
than a substitute for, expropriation because it does not generally deal with larger
properties. The Project depends entirely on the initiative of community associations whose
members are willing to work closely together to select a property, negotiate the price,
assume financial obligations, prepare and implement complementary sub-projects, and
contract technical assistance. Given the difficulties of organizing larger beneficiary
associations of this kind, the average size has been small compared with that of INCRA
settlements, and Management does not expect this to change. In other words, the Project
typically targets smaller properties not subject to expropriation. The large majority of the
20
properties acquired under the pilot Project could not have been legally expropriated.
because they do not reach the minimum size required for expropriation under the
Constitution and related legislation. The average size of properties expropriated by
INCRA in the Northeast was 1,566 ha in 1997 and 1,463 ha in 1998 (2.3 and 1.8 times the
Project average, respectively,in each of the two years). In addition, of the small numberof
properties that could have been legally expropriatedon the basis of their size, many would
not have been considered unproductive (i.e., meeting the non-perfornance of social
function criterion, which is also required for expropriation). According to INCRA,
because of these restrictions, nearly four million properties (corresponding to
approximately 200 millionha of land, some of the best in the country) are out of the reach
of expropriation. In summary,the market-basedapproach has, for all the reasons detailed
above, been a complementary instrument rather than a substitute for expropriation.
Looking to the future,the market-basedoption would not replace alternativeapproachesto
land reform, such as expropriation,but it would constitute an extremely importantoption
in the Govemment's array of instruments for dealing with serious and long-standingland
issues.
4.32 Expropriationas A Form of Punishment. The Requestors assert that land reform
through expropriationpunishes owners who maintain large tracts of unproductive land.
Whatever the theoretical merits of this argument, expropriation in Brazil has, in practice,
resulted in compensationwell above the market value of the land and thus in a significant
transfer of resources to the previouslandowners.
4.33 Under the pilot Project, land has been acquired at an average cost of R$182/ha or
R$4,847/family. The nominal cost of expropriated land in the Northeast in 1998 was
R3 11/ha and R$8,229/family.Since part of the expropriation compensationis paid in long
term government bonds (TDAs) at below-market interest rates, the nominal values for
expropriation need to be adjusted to present value terms to be comparable to the cash
payments to owners under the Project. Employing an estimated medium- to long-term
interest rate of 16%, the cost of expropriated land in the Northeast in 1998was R$249/ha
and R$6,578/family- still well above the unit costs under the Project. Moreover,in many
cases expropriated owners later obtain additional compensationthrough judicial actions. A
recent study shows that the final cost, after judicial action, of expropriatedland in the
Northeast has averaged three times the initial compensation amount. As the President of
INCRA testifiedduring the Senatehearings on the Cedula da Terra program:
"...We are paying some rural properties amounts in excess of RS1OOmillion
[around USS100 million at the time]. None of those properties is worth 10% of
that value. Thosevalues are the result not of over-valuationby INCRA, but actually
of under-valuation. When INCRA under-values, the owner goes to the courts,
which normally rule in their favor. These processes take several years, accruing
compensatory interest charges...For years and years we paid 12% plus TR [an
inflation adjustment], compensatory interest and interest on arrears...This is the
worst business...Is this what the beneficiaries [of agrarian reform] want? Is this
punishment? It could be a psychological punishment, but it is not reflected in
material termsfrom any point of view."
21
Cluster (c ): Claims Concerning Environmental Assessment
4.34 Claim No. 7: The Project violates OD 4.01 on Environmental Assessment.
The final sentence of para. 1(b) of the supplementalletter to the Requests claims that:
"Moreover, the appraisalpolicy of the World Bank such as OP 4.01 [reference
should be to OD 4.01] EnvironmentalAssessment, was not put into effect."
The claim is not discussedelsewhere in,the Request, no informationis presented to show
harm, and the Inspection Panel did not include this item in its Notice of Registration.
Management agrees with the Panel on this point. However, in the interests of providing
full information aboutthe Project,Managementwould like to make the followingpoints.
4.35 In compliance with OD 4.01, the Project was screened and given an Environmental
Category "B", as no significant adverse environmental impacts were expected to result
from Project activities. Given that the specific properties to be purchased and the
complementaryinvestmentsthat would be needed would be identified only in the course of
implementation,the approachfollowed (typical of programmaticprojects of this kind) was
to make provision in the State Operational Manuals for proper environmentalscreening,
analysis and mitigation mechanismsfor subprojects. Concerningeligibilitycriteria for the
purchase of land, the Manuals state that properties considered for purchase must
demonstrate potential for sustainable exploitation of natural resources; they must be
properly demarcated and legal reserve areas registered in writing; they cannot be located
near indigenous reserves if they are not clearly demarcated; and no properties will be
considered which are primary forest or on which there are land claims by indigenous
people. By way of illustration, in the material which Management is providing to the
Panel, are examples of environmental protection plans for land purchases and on land
investments.
Cluster (d): Claims ConcerningConsultation, Disclosure of Information
and NGO Participation
4.36 Claim No. 8: The Bank Failed to Consult and Adequately Inform ProjectAffected People and Their Representatives; Claim No. 9: The Project Violates BP
17.50 on Disclosure of Operational Information; and Claim No. 10: The Project
Violates GP 14.70 on InvolvingNon-GovernmentalOrganizationsin Bank-supported
Activities. The Request alleges that information about the Project, including the
Operational Manual, was not made available to Project beneficiaries or their
representatives, as required under BP 17.50 (incorrectly referred to as OP 17.50 in the
Request). The intent of BP 17.50 is to establish a mechanismthrough which transparency
concerning Bank-supportedoperations is effected by the release by the Bank of relevant
information to the public through the Public Information Center (InfoShop)at key stages
of Project preparation.
22
4.37 Disclosure bv the Bank Managementhas disclosed all standard informationon
the Project (Project Information Document/PID. Environmental Data Sheet. and Project
Appraisal Document/PAD) through its InfoShop. Moreover, the Country Management
Unit for Brazil is located in the field and routinely assists interested parties who mav not
know how to access the InfoShop in Washington, D.C., to obtain documents which are
available to the public. Meetings of Bank staff with some representatives of the
Requestors have taken place, including a meeting with the Bank's Country Director on
October 14, 1998. In this meeting, the Director indicated the Bank's willingness to
maintain an open dialogue on land issues in general, and on the Project, offering to share
the major findings of ongoing evaluation studies with the Requestors and welcoming a
mutual exchange of views on these findings. The Bank intends to continue its efforts to
find common ground on land issues with the Requestors and other organizations,building
on the process already started in order to ensure the best possible outcome for the
beneficiaries.
4.38 Dissemination by the Borrower. With respect to the Operational Manual and
related information at the local level, the STUs in the States where the pilot Project is
being executed sent copies of their OM's early on to representatives of most of the
organizations which have signed the Request. Specifically, the OM was sent to various
church groups, the Movimento sem Terra (MST) and the State Federations and National
Confederation of Rural Workers (FETAG/CONTAG). Managementis making availableto
the Panel some 100 examples of the covering letters attaching the OM to organizational
signatories of the Request and other institutions. In addition, all States have conducted
information campaigns about the Project through radio, television, pamphlets and posters.
Examples of tapes used on television and radio, as well as many examples of the
pamphlets and posters about the Project, are also being made available to the Panel. In
many of the declarations in the video and audio tapes which have been provided to the
Bank and are available to the Inspection Panel for consultation (para. ,1.5),beneficiaries
themselves describe having first heard about the prograrn through radio and television, or
through the local rural syndicates,the church or the MST. Given that 8,000 familieshave
already received lands and titles, 7,000 will receive loans shortly, and another 28,000 are at
varying stages in the process - all in less than 18 months - it is simply not crediblethat
there has not been a major effort at informationdisseminationabout this Project.
4.39 Participation of Beneficiaries. The design of the Project places beneficiariesin
the driver's seat, and its success depends entirely on their active participation,through
community associations, in all stages of the Project cycle. The associationsmust selectthe
land they wish to purchase, negotiate the price with the seller, take the loan, identify and
execute complementary investments, and contract technical assistance to improve
productivity and output of their new properties. The Supplemental letter claims that:
"...the States of Ceara and Bahia...communityassociations are being constituted (i) by
the agents of the state governments, mediators of the interests of the landowners,or (ii)
by the landowner himself, interested in selling his land. In the great majority of cases
studied, the rural workers are not aware of the commitment they are pledging, because
the information that they are assuming a credit burden is omittedfrom them."
(
4.40 Management believesthese assertions are unfounded. W'ithrespect to the States of
Ceara and Bahia. a number of communityassociations pre-date the Project. In Ceara, 84%
of the participating associationsexisted before the Project, some of them for as long as 9
orlO years. Of the remaining 16%, some were established at the initiative or with the
participation of the local rural syndicate; others followed the example of neighboring
communities. In Bahia, most of the new associations have been formed with the support of
the church, the local rural syndicates,the MST and other pre-existing local organizations.
In addition, the States have organizedmeetings with each of the associationsto reviewthe
conditions of the land loans. In the videotapes available to the Panel, almost all
communities state that they knew they had to pay for the land and the conditionsof the
loans. The communitiesthemselvesheld meetings to discuss whetherthey should take the
loan. The results of these meetings are regularly recorded in minutes signed by all
members of the communityassociation. Examples of such signed minutes are availableto
the Panel. Managementis aware of some cases where landowners or their agents have
attempted to use the community associations, but the members have resisted, and the
communities and STUs have been very attentive to this possibility. The fact that the
average cost of the Project lands has been below expropriated land prices suggeststhat
landowners who may be attemptingto subvert the process are not generallysucceeding.
4.41 Participation by Non-governmental Organizations. The local chapters of
several of the rural movementswhich have signed the Request have been involved in the
Project, and have played an importantrole in disseminatinginformationabout it, helping to
organize new community associations, assisting communities in processing their
paperwork, providing transportationfor them to be able to visit alternativeproperties,and
helping with the decision-makingprocess about which property to select. Community
associations are also free to contract with any local technician or organization for the
provision of technical assistanceto help them improve the productivity and output of the
lands purchased. In the video and audio tapes which the Inspection Panel may wish to
consult (para. 1.5), there are numerousexamples of beneficiariesmentioningsuch help:
"The MST lets us know about the Project, helps us to get organized, lends us money
during our organizationphase, and is now providing technicalassistance to us. "
"We were part of one of the invasions [of private farms] organized by the MST, when
one of the [MST] leaders told us about the CdaT Project and helped us to get organized
to be able to participate in it."
"The rural syndicate flocal affiliate of CONTAG] let us know about the Project ,helped
us to form the associationto participate, helped us with the paper-work helped us with
the negotiation of the land, and continues helping us with the wholeprocess."
Statement by a local Catholic priest: "The CdaT program should be implementedat a
much faster pace. We have been able to organize the communitiesto participate in it at
a muchfaster pace than the speed with which the money is becomingavailable."
4.42 Despite this kind of help on the ground at the local level, the national leadershipof
some of the most important rural movements remain opposed to the Cedula da Terra
24
program and have refused to participate in formal Project councils. The followinc excerpt
from the Senate Hearings in Brazil on the pilot Project reflects this position.In discussing
the invitation to representatives of the national movements to participate in the
Consultative Council for the Project, the MST representative to the Senate Hearing had
this to say:
"...Not only will we not participate in the council, but we will fight this type of'
Program. I would like to leave this fact very clear and to be objective, becausewe
do not want to create illusionswith anyone about this Program."
Chapter V: Conclusions
5.01 Management considers that the Brazil Land Reform and Poverty Alleviation
Project is a very well designedoperation. As a pilot, it is being closely supervised,studied
and fine-tuned. The Projectis already yielding significantresults on the groundfor a large
number of poor rural families in the Northeast of Brazil, and shows excitingpromise as a
cost-effective, expeditiousand non-conflictivemeans of achieving a redistributionof land
assets. It has not and would not replace all alternative approaches to land reform, such as
expropriation, but it does constitute an extremely important option in the Government's
array of instruments for dealingwith serious and longstandingland issues.
5.02 The Requestors do not demonstrate real or potential harm to any direct Project
beneficiaries, nor do they seek to improvethe Project design or execution. The objectiveis
to stop the Project and prevent expansion of market-based land reform,.because they
advocate "punitive expropriation"as the only "legitimate" means to redistributeland assets
in Brazil. The foundation of this argument is philosophical,and centers on a policy choice
of the Government, and not on the proper application by the Bank of its own policies and
procedures. The only specificclaims of non-compliancewith Bank policies and procedures
are unsubstantiated and are drawn from a separate letter, signed by one Requestorand not
part of the Request as defined by the Panel. None of the identifiable signatories of the
Request is a Project beneficiary(para. 3.5), and no evidence is presented to show that the
beneficiaries designated any of the Requestors to act as their agent in presenting the
Request. On the other hand, there is now voluminous documentation from the actual
beneficiaries, expressing their clear and passionate support for the Project. In addition,
among the signatures to documents repudiating the Request are those of local
representatives of churches of various denominations, local mayors and municipal
assemblies, and rural syndicates (affiliates of the national CONTAG), also voicing their
support for the beneficiaries' position.
5.03 For the reasons shown above, Management respectfully submits that the Request
does not meet the requirements for Registration or Inspection in Resolution 93-10 of
September 22, 1993, establishing the Inspection Panel, or in the August 19, 1994
Operating Procedures of the Panel.
Matrix: Summary of Request Claims and Management ResponseI
Request for Inspection
Bank Policy or
Claims of Actual or Potential Harm
Procedures Cited
Management Response
Cluster (a) Claims concerningthe Project's
contribution to poverty alleviationand Its impact current or potential- on participant's incomesand
welfare:
Claim 1: l'he Projectviolates0D4.15on Poverty
Reduction
OD4.15on Poverty
Reduction(December
1991)
ThisOD makesbroad
for
recomnmendations
sounddesignand
of
implementation
povertyalleviation
projects.
followed01)4.15in designingthe project,which wasratc( by
Response1: Management
Group(QAG) asoneof thetwo bestprojectsin the Lalin Americaand
the QualityAssurance
CaribbeanRegionin 1997,for qualityat entry.
The Projecthasthefollowingfeatures:
(i)lt buildson economicandsectorwork, rclects the CAS,makesstrategicchoicesamonig
to povertyrcduction;
options,andadoptsaninnovativeapproach
on areaswherethe poor live andassets
concentrating
(ii) It effectivelytargetsbeneficiaries,
whichthepoorhold;
assumingresponsibility,as organiZed
with beneficiaries
(iii) T'heprojectis demand-driven
for identifyingandpurchasingland,choosingandcarryingout on-land
associations,
andcontractingTA.
investments
of productiveassets;
(iv) Theprojectfinancesthecreationandimprovement
(v) Costrecoveryandsustainabilityaredesignfeatures;
(vi) Detailedeconomicanalysisshowstheprojectwill havestrong,positiveilpact and
and
returnsundervariois scenarios:
robusteconomic/financial
combinedwitli regular,well
monitoringandevalualionis employed,
(vii) Systematic
supervision.
plannedandexecuted
The Notice of Registrationfor Request for Inspection incitdes OD4.15 and BP17.50. Managementis respondingto theseclaims and to all otilers included in
the Requestand in a subsequent,separateletter from one Requestor,which the Panelhas circulated together with the Request.
X
>
Claim 2: Beneficiarieswill be unableto repaydebts
enteredinto undertheProject.
Notionallybut not
substantively
linkedto
OD4.15in the Request
Response
2: Dcailedeconomicandfinancialanalyses
of expectedprojectimpactsin
differentsub-regions
of theNortheastwerecarriedout duringProjectpreparation
and
appraisal,takinginto accountthe likely low levelof capitalization,formaltrainingand
management
skills of Projectbeneficiaries,Theexpected
ERRfor the overallpilot Projectis
32%,rangingfrom26% in semi-aridareasto 75%in peri-urbanlocations.Recentcase
studiesbasedon field visitsto a largenumberof ongoingsub-projectsconfirmloverall
appraisal
estimates.For mostagro-climaticzones,actualfinancialviability greatlyexcecds
projections.For thesemi-aridzoneof Ceara,profitabilityis somewhatlessthanestimatedat
appraisal.As a pilot project,it wasexpected
thatsomeminor changeswould heintroduced
onthe basisof closesupervisionandongoingevaluation,includingthecasestudics. To
leaveno doubtthatevenin the leastfavorableareastheheneficiaries
will beableto repay
their landloans,in December1998the Ministryof AgrarianReformdesignedan adjustment
to creditterms.
Financialviability is strengthened
by the following:(i) projectdependence
on beneficiary
initiativeandselectionof lands,whicharegenerallyhigh quality;(ii) beneficiarieshave
immediateaccess
to matchinggrantsfor on-farminvestments
- animportantdesignfeature
whichreducesdependence
on continuedGovemmentsupport- US$1,300start-upsupporl
perfamily, andsince11/20/98,havebeeneligibleas landreformbeneficiaries
for
PROCERAfinancingfor productiveactivities;and(iii) fundingfor beneficiaries
to directly
contractTA. Moreover,accordingto the Ministryof AgrarianReformproposalof
December1998,all beneficiaries
canrefinanceloansto 20years/3years' grace/and40'
interestwith annualrepayments
of aboutRS400.In addition,recentFA)Oevaluationand
casestudiesshowthat prospects
for financialviability aregoodevenin semi-aridareas.
Beneficiaries
arewell awareof their repayment
obligationsandsomeassociations
have
startedsavingsfor this purpose.The Request
conveysthemisleadingideathal beneficiarics
of expropriationdonot haveto pay for land. Accordingto existinglegislation,they do, anid
with higherannualobligations.
Claim3: TheProjeetis not achievingits objectives.,
As above
Response
3: Theprojectobjectiveis to testa market-based
landreformmechanism
to
reduceruralpoverty,targeting15,000familicsin 3 years,and increasingtheir incomesover
timeby raisingthe agriculturalproductivityof their lands.
A. In lessthan18months:8,000familieshavereceivedlandandtitle; 7.000familieshave
purchases
negotiated
andareawaitingloans;anda waitinglist of 28,000familieshave
purchase
proposalspendingapproval.The BrazilianGovernment
is atlemptingto negotiate
with the Bankanexpanded
programincludingthefinancingof the28,000waitingfamilics.
B. Recentstudiesproject:(i) in 13ahia,
a three-foldincreasein householdincomicover 10
yearsnetof landrepayments;
(ii) in Ceara,the semi-aridregionmeansincomeis more
volatilebut nethouseholdincomeis sutfcient to servicedebtover 10ycarsanl provide
safetynet for droughtyears. Otherstudiesbroadlysupportthesercsults.T hc project
provideslandandlitle, aswell as thefinancialandtechnicalsupportfor benliciarics to
initialefarmingactivities,theoutcomeof whichin termsof incomeandwellbeingwill
obviouslydevelopover time.
in the
Claim 4: The Projectwill leadto increases
pricesof agriculturalland.
As above
Cluster (b): Claimsconcerningthe
Constitutionality of pursuing a market-based
approachto land reform In Brazil, and whether
this approachIscrowdingout or supplanting
expropriation as a meansto redistribute land
assets:
No Bankpolicyor
procedureis citedin the
Request,for claimsin
Cluster(b)
asa
Claim 5: The Projectis not beingimplemented
pilot (andis beingexpanded
withoutproper
evaluation).
*
believesthereis noevidenceto support thisclaim.
Response
4: Management
All availabledataindicatelandpricesin Brazilarefalling dueto economicslabiiizationand
thecurrcnteconomiccrisis mightchangethis. I lowever.
removalof agriculturalsubsidies;
the pilot projectis too smallto exertsignificantinfluenceon themarket:in 1998.the proiect
in the five pilot states.Mureover,banks
accounted
for 0.3%of agriculturallandstransacted
confirmthatlargestocksof landareheldas collateralfor defaultedfarm
andlandowners
in selling. It seemsunlikely, comparingthe size Of
ownersinterested
debt,andfor absentee
thelandmarketandthe scaleof theProject,thateithertheongoingprojector any
contemplated
expansionwouldsignificantlyaffectthe priceof agriculturalland.
however,will bemonitoringthe situationto beableto takeappropriatcaction
Management,
(para.4.22).
if thereareanyindicationsthatthis is happening
Response
5: Management
believesthatevenif true,this would not begroundsper se for
allegingharmto individualsor participants.In fact,this projectexemplifiesa successful
approach
to piloting.
with a limitednumberof beneficiaricsin five states
It is designedto test anew methodology,
and,despiterapidexecutionandhighdemand,it still accountsfor < 10%;of all landreform
beneficiaries
in 1998.
Sinceit is a pilot, intensivesupervision,
nationalandintemationalseminars,study toursand
:workshopshavefollowedits progress.FAQhascompictedfield casestudicsanda seriesol
otherstudicsarecompletedor underway.Theseincludeanambitiousevaluationinivolvinig
householdintcrviewscomparingproject-.traditionalsystemsof landreformandnonbeneficiaries.Findingsto datearealreadybeingreflectedin the projectitself anddesignof
with GovemmcntIseeAnicx 13for
thenew AdaptableProgramLoanunderdiscussion
lessonsleared).
Claim 6: The Projectis a substitute,not a
complement
to Brazil's Constitutionally-mandated
landreform,i.e.,expropriation.
Response
6: Management
understands
thatexpropriationis only oneof the landreform
instruments
Constitutionallyandlegallyavailabicin Brazil -- Article 184of the Constitution
doesnot precludeothermethodsincludingthe privatepurchase
andsaleof land,andthe
LandStatuteof 1964(Title 11),specifiesalternativemeasures.
Management
believesthemarket-based
approach
doesnot andshouldnot supplantall other
methodsbut testingalternatives
whichcanachieveswif/cost-effectivere-distributionof land
assets,
is a prudentstepfor Brazil.Thepilot Projectabsorbed
only 3.5%of Ihe land reform
budgetin 1998,andin 1999thiswill dropto 2.1%.
Thcreasonsfor testingaltematives
includethe highcostandlimited sustainahilityof the
traditionalapproach.
The argumentthatexpropriationis neededto "punish"lairge
landownersis indeed,fallacious.In practice,expropriationresultsin compensation
well
abovemarketvalueof the landdueto legalactions,andthushascompensatedl,
not punishe(l.
landowners.
Finally,the substitution
argumentis invalid becausetheprojecttypically targets
smallerandproductiveproperties,not subjectto expropriation.
Cluster(c): A clim concerningenvironmental
Assessment
Claim 7: The ProjectviolatesOD 4.01on
Environmental
Assessment
OD 4.01on
Environmental
Assessment
(October
1991).The OD requires
screeningof projectsat
appraisalto detect
potentiallyadverse
environmental
effects.
The Request
raisesbut
doesnot discussor
substantiatc
thisclaim
andit is not includedin
the Registration.
Response
7: Management
hascompliedwith OD4.01.T'heprojectwasscreenedandgiven
anEnvironmental
Category"B" because
nosignificantenvironmcntalimpactswereexpectcd
from projectactivities.
Giventhatthe specificpropertiesto bepurchased
andthecomplementary
investmentsthtt
would beneeded,
would beidentifiedonly in thecourseof implementation,
thc approach
followed(typicalof programmatic
projectsof this kind) wasto makeprovisionin the
OperationalManualsfor properscreening.
analysisandmitigationmechanisms,
includiig
for on-landinvestment
subprojects.Manualsstatethat propertiesmustdemonstrate
potential
for sustainable
development;
beproperlydemarcated
andlegal'reserves
registeredin writing;
cannotbe locatednearindigenouspeoples'reserves;andcannotbeprimaryforestor he
subjectto indigenous
peoples'claims.(Samplecnvironmentalprotectionplnnsavailableol
request).
Cluster (d): Claims concerningconsultation,
disclosureof information andNGO participation
Claim 8: The Bankfailedto consultandadequately
peopleandtheir
informproject-affected
representatives
BP17.50on Disclosure
of Operational
Information(September
1973);andGPI4.70on
Involving NonGovernmental
(NGO) in
Organizations
Bank-Supported
Activities(March1998).
TheGP is technically
ineligibleunderthe
InspectionPanel
Resolutionandwasnot
includedin the
Registration.
andparticipatoryapproachto this
hasadopteda transparent
Response
8: Management
project.Thisis facilitatedby:
(i) locationof the BrazilCMU in the field, with a staffmemberdevotedexclusivelyto
liaisonwith civil society;(ii) StateTUs earlyon sentOperationalManualsto mostRequestor
mne(ia
groupsincludingthe Church,MST,andCONTAG;(iii) all five staleshavecondtucted
confirm first hearingof the proJect
campaigns
(materialsavailableonrequest).Beneficiaries
throughradioandTV, local unions,the ChurchandMST;(iv) hugedemandior landunr(lr
hasnot occurred,and
the projectcontradictstheclaimthatinformationdissemination
*lependson fill
obligations;and(v) projectsuccess
their repayment
understand
beneficiaries
mostof which pre-datethe
beneficiaryparticipationat all stages,throughtheir associations,
discussmeritsof takingthe loanin open,recordedmeetilgs. The vcry
project.Associations
havefailed and
haveattemptedto useassociations
limitedcaseswherelandowners/agents
lessthanthepricespaidfor expropriatedlandsin
the fact thatpricesfor landhaveaveraged
thesameregiontestify to this.
Claim 9: The ProjectviolatesBP17.50on Disclosure BP 17.50(incorrectly
referredto asOP17.50in
of OperationalInformation
theRequest),establishes
hasdisclosedall slandardiiformation on theproject,asrequired
9: Management
to promote Response
a mechanism
DataSheets,andProject
underthe 131':ProjectInformationDocument(PID), Environmental
in Bank
transparency
operationsby releasing AppraisalDocument(PAD), throughits Public InformationCenter(InfoShop).
relevantinformationto
the publicat key stages
of the projectcycle.
ANNEX B: Project Supervision and ImprovementsIntroduced
1.
The first year of implementationof the pilot Project has been a period of learning
during which important lessons have been learned through intensive supervision,
international and national seminars, studies and workshops. The Project is part of the
Bank's Compact for Rural Developmentand has received more than average supervision
support. Some 65 staff weeks have been used in Project supervision over a 20-month
period, well above the average for other prdljectsin Brazil, and with more than 70% of
supervision time provided by staff of the Bank's Brasilia and Recife Offices. Besides
formal supervision from Bank Headquarters, project staff in the field officeshave made
some 18 visits to participatingstates since the project started. The Project has also been
visited by the Brazil CMU Director and other Bank Directors including from the Africa
Region. In addition, the project has been discussed in three major seminars with
extensive participation from Government and the Bank, the private sector/civilsociety,
2 There
NGOs, academia, internationalspecialists and multilateral/bilateralorganizations.
have also been a number of workshops involving the State Technical Units with the
associations in each state. Availableto the Panel for its review, is a report and two audio
tapes of the meeting of the presidents of all community associations involved in the
Project and some of their membership, in Bahia in November 1998. The findings and
recommendations were reviewed by the beneficiaries with State Governmentauthorities
and the Minister of Agrarian Reform. The result of all this activity has been a series of
lessons which have been or will be incorporated as changes or adaptationsin the existing
project and the design of the follow-up, Adaptable Program Loan. These include:
(a)
Access to Land. A central lesson learned and the message being received from
many organizationsand the beneficiariesthemselves, is that the target populationfor land
reform wants access to land in a rapid, participatory and less conflictive manner, even
though they know the land must be paid for. Proof of this was the huge demand for
2 Seminarswere: (i) Agrarian Reformand SustainableDevelopment,Ceara23-25November,
1998.
Organized by the State Governmentof Ceara and the Ministry of Land Reform with supportof the Bank,
the Bank of the Northeast,the NationalForumof StateLandOrganizations
andUCA. About100persons
wereinvitedto participate,fromtheFederalGovemment(Ministryof LandReform,INCRA,IPEA,
MinistryoftheAmazonandEnvironment,
BNDES,
andBankof theNortheast),
oftheStateGovernments
(CearaandBahia),of NGOs(CONTAG,Pastoralda Terra),nationaluniversitiesandinternational
bodies
(FAO, IICA); (ii) Land Reform Seminar: Perspectives for the 21" Century, Brasilia, December17-18,
1998. Organized by the Ministryof Land Reform, NEAD and FAO. Invited participantsfrom INCRA,
the states, technicians and specialistsof the Ministry of Land Reform and Ministry of Agricultue,
academics, social movementsand the general public. The seminar focussed on a group of studiesand
surveys done by specialistsfrom top Brazilian academic bodies (UNICAMP,IPEA, UFRRJ,and others).
Presentations were made by these bodies and comments followed from representativeswhich included
FAO, CPT, ITESP, CONCRAB,CONTAG,CEPAL and the Bank; and (iii) International Seminar on
Asset Distribution, Poverty and Economic Growth, Brasilia, July 14-17, 1998. Organizedby the
Ministry for Land Reform,the Bank and supported by IICA. Participatingwere Brazilian authoritiesfrom
Land Reform Ministry, Labor, Extemal Relations, Education, and the Treasury. Also involvedwere the
Bank (Stiglitz and Nankani),IDB, MIT, University of Maryland, DELTA,USC, UC, London Schoolof
Economics, and academics from Mexico, South Africa and Colombia.
purchase of land which exceeded 40.000 families in one year of Project implementation.
The market-based approach piloted under the project expedites the settlementof landless
rural families, with land acquisition from identification to purchase typicallytaking less
than 90 days. Further, projected household incomes (five years after land acquisition)
range from 3 to 10 times the pre-project household income and permit these households
to service their land loans. To date, families have generally chosen good quality land at
costs that represent savings relative to traditional methods of land reform and without
exerting upward pressure on land prices. Targeting has been effective and efficient, the
vast majority of beneficiarieshaving characteristics consistent with the target population.
Size of Beneficiary Groups: It has been observed that groups should have a
(b)
minimum of 10 familiesand a maximnumof around 50 for optimal performance. Groups
smaller than 10 familiesare likely to have difficulty forming an association board, which
is a condition of eligibilityfor land; and, the resources available to a very small group are
likely to be insufficientto make certain investments, either due to cost as in the case of
rural electrification, or to under-utilization of purchased equipment, in the case of a
tractor. For groups of over 50 families,experience has shown that managementof a rural
property by a large group can be difficult and that the tendency, demonstrated in
traditional, i.e. expropriation-basedland reform settlements, where 100, 200 or more
families are settled, is for such groupsto ultimately be sub-dividedinto smaller groupsof
around 50 families which then createtheir own associations.
c)
Community Investments: Experience of land reform over many decades has
shown that to avoid out-migrationand keep families on their land, conditions must be
created for them to establish themselves in the area immediately after land is acquired. In
the case of the market-basedpilot, a mechanism was introduced by which, immediately
after land acquisition,the Technical Unit calculates the amount of communityinvestment
to which each beneficiaryassociation is entitled, plus aid in the amount of US$1,300.00
for the cost of establishingeach family. The TU authorizes the Banco do Brasil to draft a
single contract with the association, with investment subproject resources being blocked
in each association's account until subproject proposals are approved by the Technical
Unit, at which point the resources are rapidly unblocked and disbursed. This streamlined
mechanism has brought many advantages to beneficiary families, permitting them to
immediately use the aid money to move in and get established. The certainty of being
able to use resources for investments in the land acquired, without the need to work as
paid laborers to support their families, is an incentive for beneficiaries to establish the
property rapidly and start farming.
d)
Organizations of Associations: Although many beneficiary associations were
formed several years ago and are well-organized,others were formed only very recently.
Experience has shown that these more recent associations can tend to lack a set of ethical
values and principles to guide interpersonalrelationships between the groups formed,and
an understanding of public policies and basic notions of planning, which are needed to
make settlements sustainable. These issues have been discussed at length with
participating states and the Nucleus of Agricultural Studies and Development(NEAD),
and recommendations have been adopted for the proper training of settlers to efficiently
implement and start settlement activities. creating the foundations for the settlement's
sustainability. This model for building human and social capital will also be a feature of
the proposed follow-up Project, should the Bank go ahead with its financing.
e)
Technical Assistance: Studies/observations during the first year of project
implementation indicated that official technical assistance (TA) has fallen short of
expectations in both quality and timeliness. The Project calls for TA funding for the
preparation and implementation of community investment subprojects. However,
communities need.more effectiveand efficient TA in planning family farning activities,
i.e., the production of crops and their processing, storage and nmarketing.During
implementation of the pilot, alternatives have been discussed with the States to improve
TA for beneficiaryfamilies,especially in the first three years of settlement. The amount
allocated for the communityto purchase TA has been increased during the land purchase
process and subsequentproductionplanning over the first three years after installationto
help ensure increases in productivityand incomes.
f)
Financial Charges: When the Project was prepared, the Long-Term Interest
Rate - TJLP - was selected by the Government to apply to the credits obtained by
associations to purchase lands and to define the financial charges for each loan. The
payment period as definedwas up to 10 years, with up to 3 years' grace. Studiesdone by
the Nucleus of AgriculturalStudies and Development (NEAD) indicated that, in some
regions such as the northem litoral (coastal region) of Bahia and Ceara, lands acquiredby
associations could be paid for in the period stipulated. In other regions, however,
principally the semi-arid, which is subject to frequent droughts, families could find it
hard to fulfil their repaymentobligations in years of drought. In addition, with the rising
interest rates, the TJLP rose significantly, becoming burdensome for small farmers
benefiting from the Project. In discussions during the preparation of the new Project, it
was agreed that the TJLP would no longer be used to define financial charges stemming
from the loan and would be replaced by a fixed interest rate of 4% p.a. similar to the one
to be charged by the LandBank (Banco da Terra). Moreover,the payment period would
be iricreasedto 20 years. These new charges and terms will also be valid for the current
pilot Project, and be applied retroactively as a refinancing of current land loans. There
will be no loss to Project beneficiaries, since no portion-of the loans contractedhas yet
expired.
g)
Beneficiary Participation and Consultative Councils: The design of the
Project places beneficiariesin the driver's seat, and its success depends entirelyon their
active participation, through community associations, in all stages of the Project cycle.
Experience to date has been very positive at the community level, with the associations
(many of them pre-dating the Project) showing strong interest, initiative and active
participation. At the same time, the Project also envisaged the creation of a Consultative
Council in each State, comprising representatives of Government and organized civil
society, including churches,unions (of owners and workers) and other non-governmental
organization (NGOs). In contrast to the active grassroots level communityassociations,
the Councils' performance in the first year of implementation has been below
expectations. The Bank and the Government are reviewing the functions, composition
ANNEX C: List of Studies Undertaken
Status
Study
Completed
1. Case Studieson
9/98 and
Implementationand
Impactof LandReform 2/99
Pilotin Cearaand
Cedulada
Terra(CdaT)Project
Objectives
problemsor particular
a Detectimplementation
successesin CdaTin orderto adjustitduring
implementationand improvethedesignof any
proposedfollow-upproject.
* Validateeconomicandfinancialparametersused
for the economicanalysisofthe Project
2. FarmModelsand
FinancialAnalysis
Completed * Evaluatethe economicbenefits,the financial
viabilityandthe familyincomeeffectof market1/97
assistedlandreformin differentregionsof the
country
3. Impactof MarketBasedLandReform
Pilotin Ceari
ongoing
4. SocialSustainability
Completed * Provideorientationfor the positioningof marketbased landreformwithinthepoliticalconflict
8/98
surroundinglandreformin Brazil.
and the impactof
* Analyzethe implementation
marketbasedlandreformfor the43 subprojects
includedin thefirst phasepilotin Ceara.
5. FinancialOptionsStudy Completed * Analyzeand proposealternativesto current
financialarrangementsin respectto:
11/98
* Commercialriskassociatedwith landloans(see
howbad disincentivefor collection)
* Participationof privateBanksin the administration
of landloans
Participationof privatecapitalin landloansor
*
agriculturecredit
* Linkwith PROCERAand agriculturecredit
Completed * An updateof thecost of traditionallandreformin
6. Costof Traditional
differentregionsand agro-zonesof the country
LandReformPrograms 12/98
Draft.
completed
12/98
8. Impactof Large-Scale Draft
Land completed
Market-Assisted
12/98
Reform(Bancoda
Terra)on LandMarkets
7. Long-termFinancing
for LandReform
* Identifysourcesof financingfor market-assisted
landreformandpoliciesto mobilizetheseresources
land
* Analyzethe impactof large-scalemarket-based
reformon landpricesin differentregionsof the
country
* Assessthe quantityof land availablefor sale in
differentregionsat differentprices
and procedures of the Councils to identify ways to increase their effectiveness. The
formal position of some of the Requestor organizations.against market-basedland reform
in principle, is a complicatingfactor, but the Bank and the Governmentare in the process
of renewing efforts to obtainparticipationby these groups.
9. Social Demand for
Land Reform
Draft
completed
11/98
* Determine the number and social situaton of
potential program beneficiaries
* Estimate the number of likely beneficiariesof land
reform in Brazil by region, current occupationand
income
* Determine expected impact of programon rural
poverty and relative size of per-family benefits
compared to other social programs.
10. Small Farm Viability
Ongoing
*
11. Impact of Large-Scale
Market-Assisted Land
Reform on Product
Markets
Ongoing
products
* Analyze the impact of large-scalemarket based land
12. Institutional Support,
Technical Assistance
and Environmental
Ongoing
Sustainability
Evaluate the economic benefitsand the financial
viability of different scales of agriculture
production in different regions for different
reform on product markets in differentregions of
the country
* Identify likely constraints in product markets
* Assess institutional and other aspects of Market-
Based Land Reform in the Southempart of Brazil
ANNEX D: Beneficiarnand Official Support for the Project
The followinglist cataloguesthe numerous statementsof support for the Project
received from actual and potentialproject beneficiaries, local churchesof various
denominations, local mayors and municipal assemblies, local syndicates,and state and
national officials, amongothers. Thesesupporting statementsrepresentmore than 6,000
signatures, and are complementedby personal narratives from actual and potential
beneficiaries and communityassociationson six video tapes and three audiotapes,
concerning all aspectsof the Project. Among the signaturessupporting the positionof
the beneficiariesthemselvesare those of local representativesof churchesof various
denominations, local mayors,municipalassemblies, syndicates and associationsof rural
workers.
1.
Letters and documentsof support for the Project, from 136beneficiary
Community Associations,undersignedby members of these associations.These
documentstestify to: the participants' belief in the Cedulada Terra;their
understandingof what it involvesin terms of financial and other commitments;
the benefits alreadyachievedand those they believe they will achievethroughthe
Project; the harm which stoppingthe Project would cause; their preferencefor
obtaining land through non-conflictivemeans rather than through invasionas has
been encouragedby some of the Requestors;and the fact that thesebeneficiary
associations have not asked anybody to represent them in a Requestto the Bank,
nor have they been consultedabout such a Request.
2.
Letters from 64 CommunityAssociations on the waiting list to participatein the
Project, undersignedby members of these associations. These documentsexpress
the concerns of potential beneficiaries(who have already presentedtheir
proposals for purchases of land under the program) about the possibilityof the
Bank stopping its supportfor the Project. They call for the continuationand
expansion of the Project, rejecting accusations against it which they stateare not
in accordance with what they have observed to be the benefits whichother
communities have gained from participation in the project. They also lamentthe
potential effects on other landless families, of a cessation of the Project.
3.
Names and signaturesof the participants in the first meeting of Presidents(and
other members) of all the communityassociations participatingin the Project in
the State of Bahia. This meeting - which was a successful exampleof a forum
enabling beneficiariesto bring their concerns directly to authorities- took place
in November 1998. Participantsreviewed experiences and shared lessonslearned
with all the beneficiariesand representatives, to determine the natureof problems
and find solutions. Representativesof the State Governmentparticipatedin this
meeting and at its conclusion,there was a discussion with the Ministerfor Land
Reform.
4.
Samples of preliminaryplans for the accreditation of associationswith INCRA
for the purpose of PROCERA.
5.
As a sample, a group of 34 documents demonstratingprojects under Cedulada
Terra as havingbeen declared eligible by INCRA for PROCERA land reform
credit.
6.
Examples of the minutesof 31 different CommunityAssociationassembliesto
discuss land loan conditionsand recording their decision to authorizethe contract
of such loans. Theseminutes are.signed by Community Associationmembers
and provide evidenceof how these Minutes are recorded in local registries.
7.
Examples of eligibilitycertificationreports prepared by the Project Technical
Unit after field visits to review the eligibility of a sample of 27 potential
communityassociationsto participate in the Project.
8.
More than 60 examplesof official letters sent at the beginning of the Project to
local representativesof most of the Requestor organizations/entitiesand to
public/privateinstitutionsin the countryside, attaching, for information,copies of
the Project's OperationalManual and a manual of informationon the Project to be
disseminatedlocally. Some of these letters invited local representativesof the
Requestors to participatein the State Project Council.
9.
Document of support for the Project with 29 signaturesincluding 5 directorsof
rural syndicates (associatedwith CONTAG); 3 representativesof the Church
(Catholic, Baptist,Assemblyof God); mayors and vice-mayors;5 membersof the
local Municipal Assembly and representativesof rural associations.
10.
27 signaturesof local NGOs and local technicians; one letter expressingsurprise
at the request for cancellationof the project and in favor of its continuity;one
letter from a syndicateof rural workers indicating how they are helping
beneficiary families with the program and requesting its continuance.
11.
25 signatures of elected directors of five rural associations repudiatingthe request
to stop the Programparticularly because they are representativeof beneficiaries
and they were never consulted concerning this "unfortunate" Request.
12.
Letter from a federationof rural associations with the signaturesof
representatives of seven of the member associations and 61 signaturessupporting
the Program and expressing surprise at the Request.
13.
14 signatures of presidentsand directors of rural syndicates,representativesof the
Church and local mayors, indicating their oppositionto the stoppingof Cedulada
Terra.
14.
Document with 86 signaturesof NGOs (including the Catholic Church.other
churches, masonic temples,the Rotary Club, the Lions' Club. Pastoraledela
Terra Juventude, rural associationsand federations of associations,ruralradio
stations, cooperativesand agriculturaltechnicians) and local officials (mavors.
representativesof MunicipalChambers and other municipal officials).
15.
18 letters with representativesof different tvpes of rural associations,associations
of small farmers,micro-producers,rural workers and residents of rural areas,
explainingwhy they supportthe Project, giving examples of the benefitsof the
Project and requestingthat the Bank continue its support for the Project.
16.
8 letters from pastors,priests and leaders of local congregationsof evangelical
churchesin supportof the Project, giving examples of the benefits of the Project
and requestingthe Bank to continue its support.
17.
9 letters from mayors and presidentsof local municipal assembliesrecognizing
the benefits that the Project is bringingto local communitiesand repudiatingthe
accusationsdirectedat the World Bank.
18.
Letter from the Rotary Club of Fortaleza with 47 signatures;and lettersfrom two
cooperativesand a Managerof the Bank of Brazil testifying aboutthe importance
of the Project, repudiatingcriticism of the Project and asking the Bank to continue
supporting it.
19.
Letter with 19 signaturesof local elected officials, presidents of ruralassociations
and other local public sector officials, stating the importanceof the Projectfor
rural communities.
20.
Letter.from an NGO (GestaoPublica e Cidadania)formed by the Ford
Foundation and the Getulio Vargas Foundation informing the Presidentof the
Land Institute of one of the participatingstates that the CdaT Project, knownin
that state as Reforma Agraria Solidaria, has been selected one of 20 finalists
among 600 govemmentinitiatives, i.e., one of the 20 best. Attachedto the letter
is the certificateawardedto the Project.
21.
2 letters from the Govemor of the State of Ceara and from a FederalSenator
indicating the importanceof the Project, full support for it, and notingthe harm
which would result from its cessation.
22.
2 letters from the Secretariat of Rural Development of the State of Ceara,and a
letter signed by 7 State Secretariesof Agriculture in the name of the National
Forum of Secretariesof Agriculture - Northeast Region, indicatingthe
importance of the Project and their support for democratizationin the use of, and
access to, land. The Secretariesrequest that the Project be extendedto other
states of the Northeastand they indicate that the Requestors are asking the Panel
to participatefrom the standpoint of an ideologicalposition with doctrineswhich
do not accept the principles of the market economy.
23.
Letter from 22 FederalCongressmen indicatingthat they knowthe Projectverv
well as an importantinstrumentin fighting rural poverty; that they know of the
satisfactionof the rural communitieswhich have gained access to land; and
expressing supportfor the Project because it is one of the most successful
Governnent interventionsin terms of bringing immediatebenefitsto small
farmers. They state that the organizations requesting installationof the Paneland
suspensionof WorldBank support for the Project are doing so for purely
ideological reasons.
24.
Letters from the Secretaryof Planning of the State of Bahia indicatingthe
progress made by the Project in his State and the innovative characteristicsof the
Project in which rural workersthemselves directly and freely select land to be
purchased and make investmentson that land; and a letter undersignedby the
Bishop of Sobraland the Mayor, President of the MunicipalAssemblyand
Secretary of Agricultureof Sobral, requesting that the World Bank maintainthe
CdaT Project giventhe great benefits which it has brought to low incomefamilies
and through strengtheningtheir organizations.
25.
Copies of examplesof environmentalprotection plans, completedas a
requirement for land purchaseand on-farm investments.
26.
Samplesof surveysof communityassociationsto obtain data aboutwho took the
initiative to participatein the project; availability of informationto project
beneficiaries;the repaymentobligation; who suggestedthe formationof an
association; and age of the association; data on accessto credit and participation
in organized movements(federations, rural workers' unions, the MSTand others);
data on the informationdisseminationcampaign; quality of the properties
acquired; and demand for subprojects.
27.
6 videotapes containingstatementsby the beneficiarieson differentaspectsof
participation in the process by local church,
community organization-formnation;
rural syndicates,and the MST; information available to them at the beginningof
the Project, particularlyas relates to the purchase of the land and termsand
conditions of the loan; beneficiaries' statements on the quality of the land that
they have purchasedand production which is taking place on those lands;
expressions of their rejection of the Request for Inspection; statementsexpressing
their preference for obtainingland through non-conflictivemeansrather than
through armed invasion; and expressions about the fact that these beneficiaries'
associations have not asked anyone to represent them in a request to the Bank, nor
have they been consultedby any institutions about such a request. The tapes also
contain statementsby representativesof the Church, presidents of federationsof
rural associations,and local officials. Also included are examples of the Project
disseminationcampaignthrough television.
28.
3 audiotapes:Two of them includingthe recording of a three-day meetingthat
took place in November 1998in the State of Bahia (number 3 above)with the
participation of all the presidentsand some members of all community
associations participatingin the Project, to review among them all aspectsof
Project implementation,lessonslearned, and recommendedimprovement. The
results of the meetingwere shared with the government officials and the Ministrs
of AgrarianReform. One tape presenting an exampleof a radio publicity
campaign in one of the participatingStates.
29.
Examples of brochures,pamphletsand posters used in the Project information
camnpaignin three of the participatingStates.
30.
Other documents.
All documents will be availableto the Panel.

The Inspection Panel

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