The Land Grabbers: The New Fight over Who Owns the Earth

by Fred Pearce

  It took a long time for Europeans to penetrate Brazil’s empty heart. The soils of the cerrado were deep, well drained, and underlain by abundant reserves of water. But they were too acid to grow most crops. So the land was either left alone or given over to extensive ranches, with the existing grasses nibbled at by cattle. Even after the 1960s, when Brazil built its shiny modernist capital Brasilia in the middle of the cerrado, the farm invasion was slow. But in the last thirty years, all that has changed. More than 60 percent of the cerrado—an area the size of Britain, France, and Germany combined—has disappeared under the plow. The ecological consequences are huge.

  Brazil is justly proud of how much it has reduced deforestation in the Amazon. Rates of forest loss fell by 70 percent between 2004 and 2010. Companies that process products made at the expense of the Amazon are ostracized. The world’s largest producer of beef, JBS-Fribol, has agreed to stop buying cattle from ranches associated with illegal deforestation in the Amazon. The country’s biggest bank, Banco de Brasil, has been sued by state prosecutors in Para for making loans that broke conservation laws. But the saving of the Amazon has been accomplished at a high price—the invasion of a new ecological frontier of almost equal importance.

  As the country’s plows have moved south and east, the cerrado has suffered. In recent years its grasses and woodlands have been disappearing twice as fast as the Amazon rain forest. But so far the outrage has been minimal. Investor literature in London and New York and Chicago notes with anticipation that Brazil still has more uncultivated land than the European Union has cultivated land. It declares that, since the Amazon is no longer the target, uncultivated land can be plowed up at no ecological cost. Half of it is in the cerrado.

  What happened to transform the cerrado from badlands to agricultural bonanza? Science happened. In the 1970s, Brazilian government researchers worked out how to farm the cerrado soils. The solution was to apply industrial quantities of lime to neutralize the acid—typically 2 tons per acre. By the early 1980s, the soils were being transformed. Pioneers began arriving. At first, they were often bandits. But eventually the government quelled the land wars, and with cheap credit and other inducements, persuaded farmers to move in.

  Most were from the far south of the country, and of German, Italian, or Japanese descent. They were attracted by cheap land. For every acre they sold in the south, these “gauchos” could buy 10 to 40 acres in the cerrado. The Brazilian scientists encouraged them to plant soy, a crop native to Korea and Japan that they had successfully bred for the tropics. But with time the smaller farms have been amalgamated or bought out by big farmers.

  “I was brought up in Mato Grosso,” says Valmir Ortega, cerrado director for the environment group Conservation International, which is working to protect the region’s ravaged grasslands. “I can remember as a child seeing the first soy. Before that, the land was cattle range. At first there were a lot of small farmers, but now those colonizers are being forced out. It’s the big guys now.”

  Other people have been forced out, too, as the big farmers have consolidated their rule in the cerrado. The indigenous inhabitants of the region—the Tupi, Botocudos, Cariris, and Xavante—were gradually corralled into a handful of small reserves that today, as University of Iowa anthropologist Laura Graham puts it, “seem like islands in a sea of soy.” Cut off from their hunting grounds, they are at the mercy of overseers from the big farms. They are the forgotten people of Brazil. Most Brazilians only know the name Cariris as a brand of flip-flops.

  For many years, Mato Gross was the front-line state for the invasion of the cerrado. Soy production there increased fivefold between 1985 and 1995. Two cousins became the world’s largest soy growers. Blairo Maggi, head of the Amaggi Group, and Erai Maggi at the Grupo Bom Futuro now farm about 1.2 million acres between them. Their blitzkrieg was partly funded by the International Finance Corporation, the private lending arm of the World Bank, and a $230 million loan from European banks, including the Dutch Rabobank and HSBC.

  Blairo Maggi became governor of Mato Grosso from 2003 to 2010, and is now its senator in Brasilia. The clearing of forests and grasslands in the state reached a peak after he became governor. With backing from commodities giants like Cargill and Bunge, he pushed through a plan to pave 1,000 miles of highway from his state to the Amazon river port of Santarem, where Cargill built a soy-handling dock. Soy farms spread all along the road. The Maggi family benefited hugely. Conflict of interest? Maggi replied from the governor’s office: “It’s no secret that I want to build roads and expand agricultural production. The people voted for that, so I don’t see the problem.” And he famously told the New York Times: “To me, a 40-percent increase in deforestation doesn’t mean anything at all, and I don’t feel the slightest guilt over what we are doing here. We’re talking about an area larger than Europe that has barely been touched, so there is nothing at all to get worried about.” Some say he has gone green of late. The Amaggi group is in the forefront of the new Round Table on Responsible Soy. But it is too late for Mato Grosso.

  The Maggi soy revolution has made Mato Grosso the biggest magnet in Brazil for foreign investors. A fifth of the state is now foreign owned. But what happened there is now happening across the rest of the cerrado. There has been nothing like it in the world in the past twenty years. Brazilian agribusiness is the world’s largest market for agricultural machinery, and most of the equipment is destined for the cerrado. The cerrado produces 70 percent of Brazil’s crops. Much of the corn grown there is consumed in Brazil, and the sugarcane often goes to fill the tanks of the country’s ethanol-fueled vehicles. But the soy, cotton, coffee, and other crops largely go for export. Thanks to the cerrado, Brazil is the world’s largest exporter of soy, beef, chicken, sugar, ethanol, tobacco, and orange juice. They call it Soylandia now.

  But don’t be misled. Brazilians don’t eat the produce from the rape of the cerrado. According to Conservation International’s environmental policy director Paulo Gustavo Prado, “some 60 percent of Brazil’s basic foodstuffs still come from campesinos farming fewer than 20 hectares. Big farms are for export.” And that raises important questions when many see the industrializing of the cerrado as a model for transforming Africa’s huge expanses of unplowed and unfenced savanna grasslands. If it is, then the model won’t feed starving Africans. The contrasts between rich and poor in the cerrado and across Brazil are extreme, and seem to grow as the agricultural economy booms. The disparities that could arise in Africa could be a whole lot worse.

  The Mato Grosso is lost. So I spent a week visiting giant industrial farms along the new agribusiness highway through western Bahia in northeast Brazil. The distances are huge, and so are the farms. The scenery is less than bucolic. You don’t see many trees. What you do see is a constant stream of signboards beside fields, advertising the latest strains of agrochemicals being sprayed or seeds being planted: Bayer’s soy, Syngenta’s corn, or Du Pont’s Pioneer Hi-Bred cotton.

  Agrifirma’s Campo Aberto farm is the largest of three farms owned across the cerrado by Rothschild and his partners. To find it, I drove for three hours from Barreiras, the bustling agribusiness capital of western Bahia, and then a further 25 miles down a rutted track shared by a host of other farmers. I was greeted by the company operations manager, Rodrigo Rodrigues, an engaging and confident technocrat in his thirties, who is in charge of the place. I hadn’t imagined the septuagenarian financiers did much farming themselves.

  Rodrigues is from a well-to-do farming family. His father, Roberto, was a sugarcane producer in Sao Paulo state. He pioneered growing sugar to make ethanol for biofuels, and then became the first minister of agriculture under President Lula da Silva in 2003. Rodrigo lives in Sao Paulo and runs his own farms in three states, as well as supervising the British investment. One of the four Cessnas sitting on the airstrip behind the hacienda was his. I discovered that Rodrigo once owned Campo Aberto himself. He had bought it from Milton
Da Silva, the wealthy landowning father of the Formula One champion Ayrton Senna, reorganized it, and sold it to the British high rollers in 2008. For a tidy profit, I imagine.

  “Farming is a factory without a roof,” Rodrigues said proudly as we headed out after lunch to view the fields. He grows soy, corn, and cotton, in strict rotation. That’s normal here. But he prides himself on fine-tuning the system, constantly testing different combinations of seeds, chemicals, and planting regimes. He had the data at his fingertips: the pH of any patch of soil, rainfall for every day the crops had been in the ground, what chemicals had been added, and their impact on the chemical composition of the soil.

  Like most farmers on the cerrado, he was growing GM crops, like corn and soy. He was proud of his yields. His 10.5 tons of corn per hectare (roughly 4 tons per acre) was close to American standards. “When I graduated from college in 1997 we thought five tons was good,” he said. But he was more concerned about his bottom line. “Last year we lost money, so we are trying to keep the same yield now with fewer inputs and using less machinery. My aim is to economize, not maximize.”

  Was he a land grabber? He didn’t see things that way. After all, whatever the cowboys got up to in the past, stealing land from the Indians and plowing up the wildlife, he had simply bought the farm from Da Silva and sold it to British investors. Yes, he agreed, there were indigenous communities living near the farm. Yes, they were its former inhabitants. But he had commissioned an anthropologist to tell him their needs. He held a Christmas party for their children, even if he was frustrated that some of them “stole the presents.” He offered them the chance to grow food for the company canteen, though “they didn’t respond.”

  He hired them to work on the farm too, “when we can; when they are qualified.” But the jobs were limited. Agrifirma’s high-tech farms have only 180 staff to run 100,000 acres. That is fewer than one employee for every 500 acres. He said he had given the local communities help in getting formal title to land they currently occupied. How much land was that? Some 1,200 acres—for three hundred people. That ought to be, as he said, “enough to grow their own food.” But it was a tiny fraction of the size of the farm and of what they must have had before. He aspired, he said, to deliver “the 3 Ps: people, profit, and the planet.” I am pleased he thinks about people and the planet, but profits come first. Rothschild and Slater, I am sure, would have it no other way.

  Across the table at lunch, Rodrigues’s new would-be investor had been sizing up the margins. I also sat next to a European lottery entrepreneur spending his winnings from other people’s bets by taking a flutter on another farm down the road. He said he had been introduced to the area by Rothschild. Driving back down the track to the main road, I passed a farm bought in 2007 by George Soros’s Adecoagro enterprise. Adecoagro is registered in Luxembourg but has farms in Brazil, Argentina, and Uruguay. It claims to be “one of the leading companies in the production of food and renewable energy in South America.” It raised $300 million in early 2011 to buy more land and build a sugar-processing plant. The Qatar Investment Authority took a share.

  Next, I retraced my steps to Barreiras, the engine room of the current assault on the cerrado. I wanted to discuss the ecological importance of the region with a local biology professor, Fernando Lutz. We sat in a bare lecture room in the new campus of the University of Bahia. The globalization of the cerrado is a tragedy for nature, he said. The world has shown its enthusiasm for saving the Amazon, but it has ignored the fate of the cerrado. It contains a third of all Brazilian biodiversity, including some ten thousand plant species, more than four thousand of them found nowhere else.

  Or at least it used to. For the high plateaus of the cerrado, which are the most biodiverse, have proved the most tempting for farmers. The best is already gone.

  Lutz planned a three-year expedition to explore every foot of a 45-mile cross-section of the district of Formosa do Rio Preto, just north of Barreiras, to find out what it still contained. But he had better be quick, said Flavio Marques, an environmental adviser to the Bahia state prosecutor, who I met across town later that afternoon. Marques was sitting in front of a giant floor-to-wall satellite image of western Bahia. Green slivers of natural cerrado vegetation followed some river valleys. But elsewhere, and particularly in the plateau close to the border with neighboring Tocantins, including Formosa do Rio Preto, the coloring was almost universally pink. Pink denoted crops.

  The fastest loss of cerrado today is in Formosa do Rio Preto, he said. More than 500,000 acres disappeared to agriculture in that district alone between 2002 and 2008. I didn’t need telling why. As we spoke, trucks from all over the district were lining up nearby to empty its latest harvest into Cargill’s soy-collecting silos.

  Marques told me he was in charge of imposing in western Bahia the minimum environmental standards required by Brazil’s long-standing forest code. The code said that developers in the cerrado should leave 20 percent of the land intact as “legal reserves.” But he was in despair. Three years before, he had sent out a letter asking all farmers of more than 12,000 acres to show him details of their legal reserves. So far, he told me, only a tenth of them had bothered to reply. “The majority of them don’t have legal reserves, but they think they can get away with it,” he said. They are probably right. “The state of Bahia often offers amnesties. The private landowners have traditionally done whatever they want here.”

  Brazilian farmers freely admit they have never followed the law. Indeed during a high-profile campaign against the code in 2011, that admission became part of their case for changing it. “What is important is that 90 percent of Brazil’s farmers [should] no longer be considered illegal,” the Brazilian Confederation of Agriculture and Livestock said. “If all rural producers are unable to comply, the problem cannot lie with them.” And they won the argument. In May 2011, the Brazilian Chamber of Deputies voted overwhelmingly to approve a drastically watered-down code. It sent the new code to President Dilma Rousseff for approval. She had supported the old code, and seemed uncertain how to respond. In the hiatus, Brazilian farmers continued to ignore it.

  If the code goes, said Lutz, “the consequences for the cerrado will be very bad.” But then he surprised me. For there was another, more troubling, side to the code, he said. If landowners kept reserves at all, they were often the places where they dumped traditional communities and sited encampments for their farm workers. They were often the only place that these marginalized people had left to grow crops to feed their families. He conceded that “strict policing of the environmental laws would, in practice, damage the lives of the poorest—the occupiers of the legal reserves.”

  It was a familiar story that I heard in country after country: the poor being squeezed between commercial farmers and the demands of conservationists. But sometimes “squeezed” isn’t the right word. It was far worse than that, said Marques. He mentioned the troubling case of a huge 730,000-acre farm, the Condominio Cachoeira do Estrondo, on the soy front line in Formosa do Rio Preto. The farm was, he said, the biggest landholding in Bahia and, until recently, far from official oversight on the border with Tocantins.

  The land occupied by the farm used to be the home of three traditional communities, with hundreds of members. “They owned the whole area.” Some were indigenous people, and some were residents of quilombos, the homes of the descendents of escaped African slaves. Then, in the 1970s, the area was bought by a businessman and real-estate owner from Rio de Janeiro, Ronald Levinsohn, who later became notorious over the collapse of a savings bank he owned. He established Condominio Cachoeira do Estrondo, which is not so much a farm as a small state. Levinsohn “gradually eased the former residents out, until they were housed in a few fragments of forest reserve,” said Marques. Then, Levinsohn divided the giant property into more than thirty individual farm operations—condominiums, as he called them—for sale.

  In recent years, as law enforcement has
begun to encroach on the “condominiums,” lurid stories have surfaced about the way the farmers who run each condominium have treated employees and the people who live within and around their borders. In 2009, local newspapers reported near-slavery conditions. There were, they said, “watchtowers with armed guards at the entrance to the extensive farm.” The original inhabitants were confined to riverbanks, suffering violence and intimidation.

  Government agencies investigated and charged overseers on several of the farms with running what amounted to slave camps. The overseers picked up women and youths as young as sixteen on the street in nearby towns and from settlements near the farms. They took them to the farms, set them to work weeding the fields, and accommodated them in makeshift canvas shacks without mattresses, water, or sanitary facilities. Allegedly, they were held in debt bondage. They were prevented from leaving until it was time to pay their wages, from which were deducted the cost of the overpriced food and toiletries they were given at the camp. Meanwhile the federal environment agency IBAMA estimated that the farm operators between them had felled 190,000 acres of forest between 2004 and 2006.

  Levinsohn hit back. He claims to have been the first businessman to “believe in the cerrado,” which he had “reclaimed from squatters and outlaws.” He compares his investment in the cerrado to Deng Xiaoping’s work in transforming China after Mao. He is being pursued by a campaign of “media persecution,” he says.

  The night after hearing these stories, I watched a DVD of Grapes of Wrath, the tale of sharecroppers caught up in the dust bowl that engulfed the American prairies in the 1930s, and how they were expelled to make way for big landowners who wanted to cultivate the land with one worker and a caterpillar bulldozer. At one point Tom Joad, played by Henry Fonda, rails at the injustice of a system where there is “one guy with a million acres, and a hundred thousand farmers starving.” Times don’t change much.