Success of Brazilian land reform contested

8 May 2002

Brazil is clearly a controversial illustration of World Bank land reform policy. Land distribution in Brazil is particularly unequal and has created strong tensions among social groups. The $90 million World Bank pilot project initiated in 1997 set up a Land Bank to provide loans for farmers to buy land. Five years later, a draft study conducted by the National Forum on Agrarian Reform in the five pilot states shows that families are unable to produce enough to survive, let alone to repay the loans. The study challenges the efficiency of market-driven mechanisms, not only because they are distorted in the case of Brazil, but also because they are insufficient to ensure effective poverty reduction. The authors say natural problems such as poor soil quality and droughts alone cannot explain the programme’s failure and they call for reinforcement of high-quality and long-term technical assistance. The Bank has nonetheless declared the project a success, and in November 2000 – before any of the loans had come due – approved an additional $200 million to expand the program.

‘A Ticket to Land’. The World Bank’s market-based land reform in Brazil, Sergio Sauer, University of Brasilia

World Bank Project description

The WB and the Land Bank: Enhanced Poverty in Brazil, Institute for Socioeconomic Studies