Land concentration and inequality in Brazil WB Land&Poverty– 2017 Gustavo Ferroni gustavo.ferroni@oxfam.org.br 23/03/2017

Report: Inequality Terrains https://www.oxfam.org.br/publicacoes/terrenos-da-desigualdade-terra-agricultura-e-desigualdade-no-brasil-rural

What will we talk about? Land inequality has been historically institucionalized by public policies in Brazil. There is a evidence of a strong correlation between economic inequality, under development and land concentration Land governance versus Land reform (distribution)

KEY FIGURES ABOUT LAND IN BR 0,9% of properties control 45% of Brazil’s land Women control only 12,7% of rural properties that represent only 5,5% of Brazil’s land 43,6% of the public finance for agriculture is concentrated at large properties, which represent only 0,9% of loans 47% rural properties have 10 ha or less and occupy only 2,3% Brazil’s land. But produce 70% of the countries food.

Historical background – miles stones From colony based on large plantations to the Land Law of 1850: You had to pay to get public land = exclusion in the system DNA 1960’s labor government pushing for land reform and widespread support according to IBOPE polls = civil-military coup oriented agriculture discussion to technological development After democratization, trying to accommodate two systems – a ministry for agribusiness and one for smallholders, Pronaf, support for smallholders

Institutionalized Land inequality Credit and loans – 43% of credit goes to farms with more than 1.000 ha Tax: (ITR) Owner declares area and degree of usage The larger the area and the more usage, more tax is paid BUT the amount is so low that has no impact on land concentration ITR revenue represents only 0,0887 of federal tax income (2014)

Land concentration, inequality and development Municipalities with relevant presence of agriculture in their economy 20% of municipal GDP > 2.184 municipalities. Comparative analysis of: land concentration, GDP per capita, HDI, income concentration. Separated three groups: 1% with higher land concentration, 19% with intermediate land concentration and 80% with lower land concentration In the 80% group, they have a higher IDH, higher GDP per capita and lower income concentration.

Land concentration, inequality and development

So, what are we actually saying? Land concentration is a barrier to development, to poverty erradication and to reducing economic inequality. We have structural causes to land concentration that are institutionalized in public policies Improving land governance will have a limited impact on development (low ceiling) if we don’t move on land reform (land distribution) – tackling the structural causes

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