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Who Are The Ruralists?

Source:  GGN.

By: Najar Tubino

It is the largest interest group in the national congress. It officially consists of 162  federal deputies and 11 senators, united under the banner of the Parliamentary Front for Agriculture and Stock Breeding.  Registering officially as a front requires the endorsement of one-third of lawmakers (198).

But the front also counts on a legion of more opportunistic adherents. USP researcher Sandra Helena G. Costa looked into the lifestyles of 374 deputies and senators in producing her thesis, “The Agrarian Question and the Ruralist Benches in the National Congress,” which includes family history and political participation as variables in the formation of regional oligarchies. Leaving aside 23 who own no property, the remaining 351 report owning a total of 863,646.53 hectares. The data was drawn from the archives of the national electoral tribunal (TSE) and the INCRA registry.

Journalist Alceu Castilho, meanwhile, author of the book “Born of This Earth”, which examined 13,000 declarations of assets among Brazilian politicians, ranging from mayors to state deputies, arrived at the sum of 2.03 million hectares. What is interesting, besides the property holdings of the ruralists, is that they represent companies and landowners who produce R$ 440 billion between agriculture and stock breeding. Agrarian capitalism in Brazil is not a family business, although families continue to wield power in various states, commanding the local political machine.

It is important to recall that during the last two decades, with the planting of vast expanses of soy and cotton in the cerrado ecosystem, and especially the rapid expansion of cattle stock, thousands of companies in the urban sector, including industries of all kinds — banks, public works contractors, commercial establishments, and former supermarket owners as have invested in the fields.

To take one example: in the 1980s, with the Polo Centro, when the military government began to allow fiscal incentives for the occupation of ranches and farms in the cerrado,  a number of  shoemakers from Rio Grande do Sul bought up properties in  Mato Grosso do Sul – Schmitt Irmãos, Reichert Calçados, Paquetá and, later on, the brothers Alexandre and Pedro Greendene, as well as Siderúrgica Gerdau, which owned 50,000 hectares in the township of Clara (MS) and planted 30,000 hectares of pine.

The same occurred with Bradesco, Votorantim and Ometto, in the Bodoquena landholding, in the Pantanal of the  Miranda River, extending more — much more — than 100,000 hectares. Bankers also participated, such as the late Pedro Conde, of the former BCN, who bought thousands of hectares in the Pantanal of the  Coxim River, site of the current Novo Horizonte landholding, run by the son-in-law, Marco Iatauro.

Also in the Pantanal, banker André Esteves, of BTG Pactual, acquired the Cristo Rei landholding from Carlos Bumlai — all 116,000 hectares of it — and was a former team member in the bank of  Olacyr de Moraes (Banco Itamarati), owner of the Fazenda Itamarati, in Ponta Porã.

Bumlai was the man in Brasília who paved the way for federal budget allowances for Constran.  At the time, Senator Carlos Gomes Bezerra (PMDB) was president of the Budget Committee. He is listed as the owner of three  unproductive landholdings.

Foreign Funds

In the meantime, the capital invested in the rural areas had multiple origins and even served for money laundering. Who control the states bordering on Paraguay, Bolívia, Peru and Colômbia, where there are productive landholdings on both sides of the border? The Fazenda Itamarati and its  50,000 hectares, currently an immense settlement, the border with Paraguay is a simple road. A Brazilian steer is worth R$ 1,700, which is to say 17 arrobas of R$ 100 each.

A cattle truck normally carries 20 animals, which adds up to R$ 34,000 per truckload. In Brazil, the official figures on the number of steers slaughtered is 40 million head, out of a total herd of 200 milhões. Obviously, the rural benches are financially supported by the stock breeders. What is more, 20 congress members are on the list produced by our USP researchers as latifúndiarios. — “great land owners.” — themselves.

And now, following the same line of reasoning, in the agricultural sector, it is associations of multinationals such as Bunge, Cargill, ADM, and Louis Dreyfus — the four sisters of agribusiness — that finance rural producers in exchange for a percentage of the crop. They have other backing as well. These are the private equity funds, which raise funds in the international market and buy or lease large landholdings in Brazil.

Among other things, they are responsible for the progress made by soy and so-called MAPITOBA cotton — grown in Maranhão, Piauí, Tocantins and Bahia. Such funds as Tiba Agro, coordinated by ex-Bank of America execs Fábio Greco and Amauri Fonseca Junior, raised more than  US$ 300 million and intend to invest in 320,000 hectares.

Or take Brasil Agro, with its 164,000 hectares.

SLC, a partnership of southern businessmen who manufacture harvesting equipment in Horizontina (RS), which plans to plant 400,000 hectares for the next harvest, entered into a land management partnership with the U.K. private equity fund Valiance Asset Mangement, known as Land & Co.

Radar, a company rum by Cosan and currently known as Raízen (as part of a partnership with Schell), bought 180 large landholdings in recent years and has set 80,000 hectares to productive use. The majority of its equity partners are foreigners.

This, in sum, is who the rural benches represent.

For this very reasons, the political priorities of these deputies and senators involves the liberation of land, including indigenous lands, ex-slave colonies, natural preserves and ecological parks.

They also want more flexible employment law for rural workers;  redefine the concept of “labor in conditions analogous to slavery;” change the rules for the registry of pesticides and other toxins and for new food products; amend legislation on landholding to facilitate the purchase of land by foreigners or in border areas; and renegotiate the debt of the ruralists as a class.

I sometimes think they don’t advocate a return to Victorian child labor because it might be seen as going too far.

In this immense country last year, more than 1,000 conflicts occurred involving ruralists, companies, funds, investors, border dwellers, Indians, former slave colonies … in short, the dispossessed.

There is no space for them where this overwhelming machine operates. Who will demonstrate sensitivity to the death of 555 guaranis in Mato Grosso do Sul in the past decade, or the 317 homicides? Not the ruralists, although they find themselves surrounded by a sea of soy, cotton and Nelore steers in the Dourados region.

Jatobá Stock Breeding and Industry of Paraná is ranked second by the Association of Nelore Breeders of Brazil, which makes it one of the best ranchers in Brazil.  But the Jatobá landholding in  Paranhos was invaded by guarani-kaiowá Indians recently. The land has been an indigenous area since 2000.  Ranked third in the rating of cattle breeders is Sabiá, property of Alberto Vale Mendes, a partner in the public works contractor Mendes Júnior.

The profile of the rural benches is as follows. The largest contingent is from Minas Gerais (24 out of53). Regional contingents, such as Mato Grosso do Sul and Tocantins, have the highest proportion of ruralist members: 87..5%.  Of the eight lawmakers from the two states, seven are ruralists.

The Center-West has the largest number of ruralists — 24 of a total of 41 are adherents. The South, however, has the highest percentage of adhesion –62,3%. That is, of its 77 congress members, 48 are ruralists. In Rio Grande do Sul, 16 of its 31 representatives are ruralists. In Paraná 21 of 30 are ruralists. In the  Northeast, of 151 federal congress members, 63 are ruralists. In the North, the figure is 29 of 65. In the Southeast, of 179, 44 are ruralists.

The party with the largest concentration of ruralists is the PMDB — 46 of its 78 congress members. Of the PSB- PTB- PCdoB bloc, 22 of 62 are ruralists. In the PP, 25 of 39 deputies are ruralists, as well as three senators.  26 of 27 members of the DEM are ruralists. In the PSDB 25 of 51 are ruralists. Of the PT’s 85 member contingent, 14 vote with the ruralists.

This census was created by researchers at the Federal University of Santa Catarina, Ivete Simionatto and Carolina Rodrigues Costa, from the Social Service group, in a study that confronts the forces that dominate the agrarian debate. A passage:

“Members of the ruralist benches are from different parties. They act pragmatically, representing no one but themselves. What we observe in the current activity of the ruralists today is the prevalence of a project to privilege the better capitalized sectors of society and use the State as a means of cooption — that is to say, social Darwinism and petty politics.

Researcher  Sandra Helena G. Costa presented her master’s thesis in the field of Human Geography at USP late last year. It is a breathtaking 325 pages of text, with appendices. Of the 374 congress members stedied — she added another 74 members of a list of ruralist-aligned legislative aides — 118 declare professions havings to do with agriculture or stock breeding — …. Of these, 59 list stock breeding as their profession. Some, however, did not declare ownership of any herds. Six ruralists list themselves as business executives: […]

In classifying ruralists by sector of business activity, she identified 25 politicians with ties to public works contractors or real estate developers. More impressive still is the number of physicians in the group — 26. Some 38 were found working in grain production, eucalyptus plantations, coffee-growing, and sugar and ethanol mills. Twenty were identified as large landholders.

Digging a little deeper into the ruralist movement, the USP researcher identified the families that dominate certain states or regions of Brazil. The case of the Caiado family, in Goiás, whose great-grandfather was vice-president of the province and commander of the National Guard, entered national politics in 1985 and retains his seat down to the presentday.  There is also the Cassol family of Rondônia, where Reditário Cassol was named mayor of Colorado do Oeste by the dictatorship and since then has dominated state politics. As it happens, he is the surrogate of Senator Ivo Cassol, his son, who was recently convicted of fraud by the Supreme Court.

There are also the families of sugarcane crushers of the Northeast: the Calheiros, Brandão Vilela and Pereyra de Lira families. The list encompasses the Bezerra Coelho clan of Pernambuco, the Rosados of Mossoró (RN) and the Lupion family of Paraná, where grandfather Moisés Lupion provided a role model for current federal deputy Abelardo Lupion, known for submitting the bill that defined those who occupy unused lands as terrorists. The grandfather was considered the most prodigious claim jumper of Paraná.

Of the deputies mentioned 54 confirm have belonged to ARENA, the official party of the dictatorship. Sandra Helena comments:

“Nominations by the military government for offices such as mayors bequeathed considerable influence in local politics. This is especially true of areas where there is land to be colonized, in cities of the North and Center-West … just as the surname was inherited from their relatives of another generation “inherited” an entire scheme of institutional power relations which the electorate will confirm by means of the ballot.

Senadora Kátia Abreu

The really interesting case is Senator Kátia Abreu, from Tocantins, where she was president of the rural syndicate of Gurupi, then president of the Agricultural and Stock Breeding  Confederation, before she was finally elected to head the CNA — the National Confederation of Agriculture.

“What is intriguing about the situation of this ruralist Senator is the fact that while she speaks out in the interest of the ruralist cause, she cannot claim to be a breeder herself. Since 1998, she has not declared a single steer in assets. She says she is a rural entrepreneur, but there is no record of any stocks or equity shares in any company. Her net wealth is R$437,182.19 and access to R$120,000 in credit. This may not be the real sum of the Senator’s assets, or she may be relying on unproductive great landholdings — latifúndio — rather than agribusiness,” comments Sandra Helena Costa.

Orthopedist and ex-president of the Democratic Ruralist Union, Ronaldo Caiado declared to the election authority the ownership of seven ranches totalling 5,172.20 hectares -– a landholding of 795 hectares qualifies as a proprietorship. His net worth grew from 2006 to 2010:  from R$ 3.671,539.53 to  R$5.950,666.62. His herd also expanded from 2,478 head to 3,246, as  well as 2,484 goats horses, and mules. He acquired 15 shares in the Rural Credit Cooperative and already owned a state in the meatpacking concern Goiás Carne.

The Culture of Bankruptcy

We cannot finish this article with citing another researcher in the field, the master’s thesis of Orson José Roberto de Camargo … of Unicamp … titled  “Brazil’s Political Elite and the Renegotiation of Debts of Crédito Rural” — the Case of the Bancada Ruralista”. One of the strongholds of the ruralist bloc is the renegotiation of debts, first dealt with by the miserable contingent of 20 deputies it sent to the Constitutional Assembly of 1988, where it worked to obstruct agrarian reform. Orson analyzes  MP 114, from March 2003, later passed as Law 10,696 in July of the same year.

The purpose of the initiative was to renegotiate the debts of mini, medium and family agriculturalists currently unable to pay their debts.

With the help of a ruralist contingent with 117 deputies, the law was modified to include all rural producers. The renegotiation of the unpaid rural credits began in 1995, when a preliminary securitization was performed. After 1998, the FHCgovernment created the Special Program for the Sanitation of Assets   (PESA). In 2001, a second securitization was issued and in 2003, the renegotiations of debut by bankrupt companies in the PESA program began. As Camargo recalls:

“A significant number of large rural producers simply grew accustomed to not repaying loans that drew on public funds. They knew they had a powerful bloc in Congress to press for action each time debts are to be renogiated. It became an ingrained culture of avoiding repayment of debts.”

Between 2000 and 2005 the federal government spent R$  15.9 billion on financing and adjustment of interest rates for rural credits, as the cost of renegotiations amounted to  R$ 9 bilhões. The renegotiations that postponed repayment for 20 years were always cyclic in nature,but as  Camargo notes, “a signficant rise in agricultural revenues starting in 2002 –and, curiously, this precise moment of prosperity in the fields coincided with an increase in renegotiations.”

In 2005 it was calculated that the debt reserves amounted to R$30 billion, citing a figure from the Ministry of Agriculture. In the accounts of the Treasury this sum rose toR$ 70 billion.

Ands o, while ruralists renegotiate their debts, guess what they do with their profits? They buy more land and cattle.