Berkeley Program in Law and Economics

Brazilian land issues have become complex in the last fifteen years due to conflicts over property rights resulting from friction among squatter peasants, multi-interest organizations and government. Conflicts in this unstable institutional environment impacted on agricultural activity with public and private land invasion, land-ownership disputes and indigenous and natural reserve lands expropriation. Based on the Property Rights Theory and New Institutional Economics the Brazilian Institutional Agrarian setting and its possible economic effects on agricultural activity are analyzed. A historical review of the Brazilian agrarian legislation based on the coded law is followed by a mapping of interests from governmental agencies that bring uncertainties due to undefined property rights arising out of controversial legislation with ambiguous interpretations and unexpected judicial results. A case study illustrates a land conflict started in 1998 between the FUNAI (National Indian Foundation) and a growers’ guild from Sao Paulo Coastal Atlantic Forest. A legal dispute ended in the area’s expropriation in 2005. Also implicated in this conflict were: INCRA (National Institute of Colonization and Agrarian Reform), Federal Revenue Service and State Government. Data obtained and analysis results revealed significant losses in private investments.