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

by Fred Pearce

  Two hours down the road from Barreiras is Luis Eduardo Magalhaes (LEM), an even newer agricultural boomtown. According to legend, in the early 1990s the town was just a gas station run by a poacher of the giant flightless rhea birds, who live amid the grasslands. What is certain is that it has grown in a decade from nothing to a town with a population of sixty thousand, centered on Brazil’s largest soy-processing plant, owned by commodities giant Bunge, and a John Deere dealership that sells tens of millions of dollars’ worth of harvesters each year. Now Cargill is here, too. And Massey Ferguson and Mitsubishi, Syngenta seeds and Dow Agrosciences. On one side of the highway, dirt tracks lead down from truck stops to stinking barrios full of booze joints and brothels. On the other side are the paved roads, starred hotels, and gated estates. In the middle is a giant bus station, from where you can go almost anywhere in this vast country.

  The administrative district around LEM covers 1 million acres, an area twice the size of Wales. But it has only had an environment secretary for a year. Fernanda Aguiar, who has the job, is a smart young lawyer who previously made a living representing farmers in environmental cases. She told me she had a staff of just five. “When this town got started, they just wanted people to come and get rich quick. There were no services or planning. Things were done without any respect for the law.” A decade on, she says, “nobody feels they belong here because nobody was born here. People have no idea about taking care of their town, let alone the cerrado.”

  All across Aguiar’s domain, the land is dominated today by big farms, locally called fazendas. Some have names straight out of the TV mythology of the American West, like Fazenda Chaparral and Fazenda Bonanza. Others betray the curiously cosmopolitan origins of their proprietors, like Fazenda Oriental (proprietor: Mr. Ming Quang), Fazenda New Holland, Fazenda Hoshino, and Fazenda Warpol, a giant spread with cotton fields that went on for miles.

  The gun-toting pioneers who cleared this land have mostly gone, selling out to a new generation of well-heeled entrepreneurs and agribusiness corporations. But fortunes have been made by those who stayed. Men like Levinsohn in Formosa do Rio Preto and his buddy Walter Horita, a Japanese-Brazilian who staked his claim back in 1984, right after bandits had murdered a neighbor. Today, Horita and his two brothers grow cotton on most of their 110,000 acres.

  South of LEM, on the road to Brasilia, I pulled up at the Sao Sebastiao Farm. A red crop-spraying plane buzzed around as Anildo Kurek, a Brazilian of Dutch extraction, told me how he began here in 1989, at the age of thirty-five. “Then it was still all natural cerrado,” he said. He bought his first couple of thousand acres with bags of soy (the preferred currency in those days) paid to “one of the earliest pioneers, who had cleared the land of bush—and people too, I expect.” Kurek came with his father-in-law and brother-in-law. “It was an adventure. There were no roads, no water, and it was hard to get fertilizer. There was no law. Well, no law enforcement anyway. No government agencies.”

  Times have changed, he said. The three of them bought twenty neighboring farms, one at a time, and created a single operation covering 55,000 acres, which Kurek now runs with 130 full-time employees. “We have to follow the rules now, well mostly,” he said, as we stood in one of his corn fields. Dwarfed by his crop, he was still slightly puckish, still slightly surprised at his luck in life, at the huge amount of land he controlled, and the giant harvesting equipment at his disposal.

  Despite its size, Sao Sebastiao felt more like a traditional farm than anything else I visited in the cerrado. Walking to lunch on the veranda of Kurek’s hacienda, we passed chickens, a vegetable plot, a playground swing, a native tree known as a goyaba, and a guard dog lazing in the shade. A cockerel crowed as the soy trucks headed out of the gate, destined for Bunge or Cargill.

  But Kurek’s neighbors were mostly from a different generation. Next door were the 55,000 acres run by American-owned Iowa Farms, which had recently been renamed Grupo Iowa to make it sound more Brazilian. Then there were the Argentines over at Los Brobos. Would he stay? “I live in Brasilia at the weekend now. It’s a four-hour drive. And my family has gone back to the south. I’ve had offers for my land but I’ve turned them down,” he said. “So far.” He was disappointed that none of the next generation of the family was interested in taking over. And the number of Brazilian farmers around there who might be keen to buy him out was diminishing. So who might buy when the time came? Would it be the British lords and asset strippers at Agrifirma? Or how about SLC Agricola, Brazil’s largest agricultural enterprise? It already has eleven farms in the cerrado, covering a total of 570,000 acres. They included the nearby Panorama Farm, which was my next stop.

  SLC does smooth corporate formula farming. Some call it the McDonaldization of agriculture—adapting the local environment to fit a standard business plan. Each of its farms runs the same cotton–soy–corn rotation, scheduled by the head office a year ahead, and personally approved by its chairman and patriarch of forty years, Eduardo Silva Logemann. Each farm is also built to a standard design, with the same recycling bins and floodlit soccer fields and Internet-enabled club for employees. Panorama’s manager, Marcelo Pegrow, said the farm was one of the company’s newest, amalgamating three old farms that had covered 67,000 acres. The company planned to buy or rent more neighboring farms if the chance arose. It certainly had the cash. Since floating shares on the Brazilian stock exchange, it had doubled its turnover in four years.

  The Brazilian agricultural boom just keeps on going. And the cerrado keeps on disappearing. The main impediment to further expansion right now, several farmers told me, was transport. Getting the crops to market is still a slow and expensive business. Rodrigues reckoned that half the cost of his soy at the coastal port of Ilheus, more than 600 miles to the east, came from trucking bills. But a new 1,000-mile railway is being built into western Bahia, reaching Barreiras by the end of 2012 and LEM soon after. That would provide another boost to agribusiness.

  So can anything hold back the tide? I had traveled with the Brasilia staff of Conservation International. They have a strategy for engaging with farmers, trying to create a coalition of those willing to comply with existing conservation laws, to protect “legal reserves,” and to establish conservation corridors across the cerrado. Curiously, CI’s corporate partner and link to the farmers was one of the biggest beneficiaries of the agribusiness bonanza, Monsanto.

  Is the strategy working? I certainly met farmers who now talk the talk—but only, they made clear, if conservation and profit can go together. And some of the effects of CI’s interventions have been perverse. When I asked Kurek how his newfound respect for environmental law was faring, he told me an unexpected story. CI’s help with mastering the minutiae of conservation bureaucracy meant he now had an environment license that allowed him to clear another 10,000 acres of wild grass and bush on his land. “We were waiting for the environmental license before going ahead with the clearance, and CI helped us get it,” he said. Not, perhaps, what they had in mind.

  But Kurek was keen to show how wildlife could thrive on his farm. “We see maned wolves here sometimes in the cornfields,” he told me as we drove around. “And rhea. They like the soya beans.” Right on cue, one of the large emu-like birds shot out of a soy field and ran down the track ahead of our SUV. We chased it for a mile before the exhausted bird found an exit back into the field. Nature is surviving here, but only just.

  The truth is that the global market is winning every round in the fight for the cerrado. The soy market is booming, in particular because it is an ideal feed for the growing herds of livestock in Asia, needed to satisfy soaring demand for meat and dairy products. China in particular relies on Brazilian soy. But Asian countries are no longer happy simply to buy the produce from the cerrado. Like their Arab counterparts, they no longer trust the markets to meet their needs, and want to control the supply chain.

  Tougher Brazilian rules on land ownership by foreigners
may cramp their style a little. But there are ways around the problem. In early 2011, the giant Japanese trading house Mitsui bought control of the Swiss-based grain broker Multigrain. Mitsui said the purpose was “to ensure stable supplies of grains from Brazil for the Asian market [at a time of escalating] global competition for crop land.” Multigrain had purchase contracts, but it also had some 250,000 acres of farmland in the cerrado that would help Mitsui meet its target of securing access to 10 percent of Brazil’s total soy exports. Weeks later, the Korea Agro-Fisheries Trade Corporation, which has been charged by the South Korean government with helping secure the country’s grain supplies, was in Bahia talking to Cooproeste, a state farm producers’ cooperative, about a joint venture. And the Chinese were not far behind.

  At Barreiras airport, I was waiting for the commuter flight back to Brasilia known to locals as the “agribusiness express.” Suddenly, a small chartered plane landed and a delegation of more than twenty Chinese piled out. They explained that they were from the Chongqing Grain Group. They had crossed the world with $2.4 billion to spend on setting up a plant in the city to process 1.5 billion tons of soy beans a year. Once in operation, it would displace Bunge’s LEM operation as Brazil’s largest soy-processing plant, and could handle half the state’s current soy harvest. Local officials were there to meet them. It looked like a done deal.

  The Portuguese word cerrado literally translates as “closed” or “inaccessible.” But now that the cerrado is open and accessible, it looks doomed.

  Chapter 11. Chaco, Paraguay: Chaco Apocalyptico

  Our six-seater Cessna took off at dawn from Asunción, the capital of Paraguay. Stretching north and west for 600 miles was a plain as flat as a tabletop, covered in dense thorn forest, some of it only ever penetrated by local indigenous tribes. The Paraguayan Chaco is the last great wilderness in South America. If you have never heard of it, you won’t be alone. Despite occupying almost two-thirds of the country, it is terra incognita even to most Paraguayans. I had come across the border from Brazil to see where Brazilian ranchers are going now that expansion in the Amazon is frowned on and they are being priced out of the cerrado by the soy boom.

  The Chaco thorn forests have many of the odd creatures that live in the neighboring cerrado, like giant anteaters, tapirs, and maned wolves. But they have some more of their own, including no fewer than eight species of armadillo and the Chacoan peccary, a prehistoric piglike creature that was known only by fossilized skeletons till someone stumbled on a live animal out there in 1975. The plant life beneath us as we flew on was equally mysterious. Besides the ubiquitous thickets of squat bushes with vicious thorns, there were giant cacti and bottle-shaped trees whose trunks hold moisture like a camel’s hump.

  The Chaco is more ancient and bizarre than the Amazon. Toby Pennington of Edinburgh’s Royal Botanic Garden calls it a “museum of diversity, a refuge over millions of years for species adapted to its unique environment.” It is one of the few places on the planet where the region between the tropical and temperate zones is occupied not by desert, but by thick vegetation. And it has, perhaps as a result, some of the most extreme weather on earth, combining torrid 120-degree summers with below-freezing winters, and searing droughts with extensive floods.

  All this has made the biology different, and human invasion perilous. Until now. For the Chaco is changing fast. The thorns and the climatic extremes are losing their power to protect it from the modern world. The land grabbers have made it even here.

  I spent nine hours flying low over the Chaco with conservationists from Guyra Paraguay, an NGO that is recording the escalating destruction, and Britain’s World Land Trust, which is funding the purchase of land to protect it. The need is urgent. A few minutes into the flight, we began seeing huge straight-edged lumps taken out of the forest, revealing bare earth. There were bulldozers at work below, and the smoldering remains of fires. In places there were new pastures, often seeded with alien, fast-growing grass imported from the African savannah. We could see scattered cattle grazing.

  As we flew on, the farms grew bigger. Ninety minutes out, there was a single spread covering 125,000 acres, ten times the size of Manhattan. It was laid out in five hundred rectangles of cleared land separated by thin strips of trees, so it looked like a giant’s paved pathway across the forest. Soon after came another 25,000-acre gash in the forest, all cleared in the previous year. I was reminded of what Pennington had told me before I left for Paraguay. “Without knowing it, we could be losing a flora that is not just incredibly evolutionarily distinct, but of vital importance. The Chaco is a forgotten forest that we know next to nothing about. At a time when we fear climate change, it seems especially crazy to be losing species that are obviously incredibly well adapted to extreme climate.”

  The Chaco forest once extended north to Bolivia and Brazil, meeting the cerrado in southern Mato Grosso, and south deep into Argentina. It covered half a million square miles, five times the size of Britain. But it was gradually eaten away by farmers. Most of what survived into the twenty-first century was its thickest, hottest, most distinctive, and most forbidding heart—in Paraguay, where it covers two-thirds of the country but contains just 3 percent of its population. Now that heartland too is under threat. Not in the main from locals, who still hate the place, but from foreign land grabbers.

  Since 2003, Brazilian cattle ranchers have been crossing the border into Paraguay in ever larger numbers. Called Brasiguayos by the Paraguayans, many are German speakers from the south of the country. At home, they are selling their ranches for thousands of dollars an acre to agribusinesses that want to plant them with soy, cotton, and corn. In the Paraguayan Chaco, they can still buy land for less than $120 an acre.

  As a result, the Chaco is changing fast. Paraguay’s largest national park, the once-remote 2 million acres of the Defensores del Chaco, home to uncontacted bands of Ayoreo Indians, is now entirely ringed by a road from which new ranches sprout. Since the 1990s, deforestation rates across the Paraguayan Chaco have risen from virtually zero to more than 2,000 acres a day, or a soccer field every 90 seconds. More than a fifth of the Chaco administrative department of Alto Paraguay has been turned into giant ranches.

  From above, you see the big landscape changes, as the mass application of land-clearing equipment makes bizarre excavations of the natural forest. You would not know that anyone lived there before the ranchers arrived. But they did, and do. And for them, it is the details that count. “On the white men’s maps, no one has ever mentioned the Ayoreo,” says Mateo Sobode Chiquenoi, president of the Union of the Native Ayoreo of Paraguay. “But we can locate our territories on a map. We cannot show a land title, but there are still signs of our presence from the past and from today, which prove that it is our territory. There are our huts, our paths, our crops planted in the forest, and the holes carved in the trees from where we harvested honey. These are our property documents.”

  We landed at a grass airstrip on a Brazilian ranch not far from the new road to the national park. The road was busy with cattle trucks, and there wasn’t a thorn tree for miles. Mosquitoes buzzed in the noonday sun. But their targets these days were humans and cattle, rather than wildlife. I asked who owned the ranch. It turned out that is a question visitors are not supposed to ask. Many of the new landowners here are anonymous. A loophole in Paraguayan land law means ownership doesn’t have to be declared. That loophole allows the big boys to escape rules intended to prohibit large landholdings. It also means estimates that 90 percent of the new ranches in the Paraguayan Chaco are owned by foreigners cannot be verified. But my impression was that much of the northernmost 125 miles of Paraguay is now, in all but name, part of Brazil.

  The Paraguayan Chaco has a brutal and bizarre history. The country’s generals fought a war here against Bolivia in the 1930s, after Bolivia had invaded in search of oil. By the time the combatants went home, more exhausted than defeated, almost one in thirty Paraguayans
had died defending a land where none of them lived. The preposterous conflict was satirized in Hergé’s Tintin adventure The Broken Ear. Even today, there is only one road through the Chaco. Constructed in the 1960s, the Trans-Chaco Highway runs straight as a die for 600 miles from Asunción to the Bolivian border. It is paved now for three-quarters of the way, as far as Mariscal Estigarribia, where in the 1980s the U.S. military constructed an airstrip 2 miles long—enough for the biggest military transport plane to land.

  Our Cessna touched down at one end of the runway, feeling very small to me. While we refueled, I could see the strip might be handy for an assault on the belligerent leaders of Bolivia. But I can report that the rumors of a permanent U.S. military garrison at Mariscal Estigarribia are false, unless they are camped out in the bush with the Indians. The only evidence of life of any kind was an aircraft filling station smaller than the average roadside gas station, and a guy in fatigues who arrived out of nowhere on a motorbike to check our ID. (In another blow for conspiracy theorists, persistent stories that George W. Bush bought a giant piece of land hereabouts also seem to be untrue. A former U.S. ambassador, Timothy Towell, did buy the 170,000-acre Fortin Patria ranch in the far northeastern Chaco. Some of the Bush family visited it. But locals say the ranch was then purchased by a Washington environmentalist, who got bored and sold it to a Paraguayan newspaper magnate.)

  One group of outsiders did set up here in the Chaco, however, long before the Brazilian ranchers rode in. Back down the Trans-Chaco Highway from Mariscal Estigarribia are three isolated colonies occupied by German-speaking Mennonites. The Christian Anabaptist sect came to the Chaco more than eighty years ago, from scattered homes in Ukraine, Russia, Canada, and later Mexico. At the invitation of the Paraguayan president, they took over 140,000 acres of the most remote part of the Chaco, an area their own chroniclers described as a “green hell.”