INCRA as a regulatory agency | Chapter 4 of “A Perfect Storm in the Amazon”

The third pillar of the institutional mission of the Instituto Nacional de Colonização y Reforma Agraria (INCRA) encompasses both administrative and legal aspects of land tenure and, as such, is the most important agency regulating rural real estate markets. Administratively, the institution is charged with collecting and organizing the records of all rural properties in Brazil, including their creation and all subsequent sales, subdivisions and unifications. Legally, INCRA functionaries must review and verify that documents are legitimate and validate the spatial attributes of individual land parcels. This is a gargantuan task that would test the governance capacity of any country but is particularly challenging in a nation of continental dimensions undergoing a massive distribution of land.

The decision to organize rural properties into a national land registry, Sistema Nacional de Cadastro Rural (SNCR), coincided with policies to transform the Amazon via migration and settlement. That task might have been completed automatically if the smallholder programmes, which distributed about twelve million hectares, had accurately and precisely recorded those transactions. Unfortunately, that did not happen. That missed opportunity was confounded by a collateral decision to facilitate a land rush that was occurring organically across the Southern and Eastern Amazon.

After about 1978, the military government became disenchanted by the smallholder settlement framework due to high overhead costs, low economic return and terrible public relations. Instead, they decided to expedite the transfer of public lands to corporations and influential families with the capacity to invest in productive enterprises at economies of scale. Over the next two decades, more than 100 million hectares of public land were transferred to large-scale landholders via a variety of legal and extra-legal operations.

The easiest way was to obtain a land grant from a government agency. Sometimes these were disguised as a concession to organize a private colonization project but were converted into a corporate estate. Another gambit was to cycle a small landholding through a series of transactions and to enlarge its dimensions at each stage. Many landholdings were manufactured out of whole cloth. Questionable deeds were laundered by the Fundo para Investimento Privado no Desenvolvimento da Amazônia (FIDAM), a subsidiary of the Superintendência do Desenvolvimento da Amazônia (SUDAM), which loaned money to corporate ranchers. FIDAM required creditors to obtain documentation verifying their property rights from INCRA’s regional offices or state agencies, all of which were staffed by individuals eager to facilitate the infusion of money into their jurisdictions.

The open collaboration of multiple state and federal agencies created a permissive environment that was exploited by speculators, who appropriated land that was sparsely populated by rubber tappers and Indigenous communities. Tacit approval for fraudulent real estate transactions had been formalized in 1976 when the military government promulgated a land regularization law that included a provision for conferring titles for properties that had been created via extra-legal procedures, if the current owners had purchased them in ‘good faith’. Each subsequent transfer of a property, or bank-mediated financial transaction, provided a layer of judicial security.

INCRA did not begin a serious effort to catalogue and review land tenure claims until about 1993, after which it launched periodic initiatives to consolidate the SNCR with increasing levels of electronic sophistication. Landholdings deemed to be legitimate were incorporated into the SNCR database, and owners were issued a Certificado de Cadastro de Imóvel Rural. As the name Rural Property Registration Certificate implies, the CCIR is not a legal title residing within the Cartorío notary system; rather, the emission of a CCIR means that a landholding has passed through a due diligence process referred to as regularização fundiária. Brazilian law requires that a CCIR accompany legal contracts that ‘transfer, lease, mortgage and dismember’ a real estate asset; a CCIR is also routinely required by banks when approving a loan. A CCIR endows a property with segurança jurídica (legal certainty) and, in spite of claims to the contrary, effectively functions as legal title.

Following the restoration of democracy in 1985, civil society clamored for legislative and legal action to combat land grabbing. An exposé published by the national news magazine VEJA in 1999 motivated the Cardoso administration to review the legality of unusually large Amazonian estates. The INCRA secretariat in Manaus conducted an audit of landholdings greater than 10,000 hectares, identifying more than 2,900 holdings covering ~87 million hectares. Putative owners were required to provide documentation supporting their claims. The audit caused INCRA to rescind title for 63 million hectares.

The scandal also motivated the creation of a congressional commission (Comissão Parlamentar de Inquérito), which investigated the illegal transfer of public lands in seven of the nine states of the Legal Amazon. Referred to as the CPI do Grilajem, the probe identified an additional 37 million hectares of public forest that had been fraudulently obtained via transactions involving landholdings between 1,000 and 1.6 million hectares. The report, which was published in 2003, provides a detailed account of the mechanics of land grabbing, the collusion of state functionaries and the complicity of magistrates who validated 24 million hectares in judicial hearings, including 12 million hectares in the name of a single individual.

Administrative action by INCRA reverted some, but not all, of those landholdings. Legal action on the part of aggrieved landholders delayed resolution, particularly in Pará where timber companies continued to exploit landholdings while the judicial system evaluated their claims. As of 2021, INCRA databases continued to list multiple forest properties larger than 100,000 hectares, including a 913,000 hectare estate that was impounded in 2004 following the congressional investigation.

The findings of the commission led to investment in INCRA’s capacity to manage the SNRC, including the development of a geospatially precise database: the Sistema Nacional de Certifcação de Imóveis (SNCI). Launched in 2003, the SNCI was a cumbersome system that relied on public servants to verify information and then incorporate the property into its digital catalogue. It was replaced in 2013 by the Sistema de Gestão Fundiária (SIGEF), which relies on the landholder (or consultant) to upload data via a web application that is subsequently verified by INCRA staff.
For some reason, presumably technical, the two systems have never been merged. The SNCI incorporated 15,330 properties and, as of June 2021, SIGEF housed ~142,000 (up from 73,000 in 2017). To put this in perspective, the number of certified properties in 2020 represented only fifteen per cent of the rural landholdings enumerated by the IBGE agricultural census of 2017. Nonetheless, the properties registered within the SNRC encompass sixty per cent of the total spatial footprint of all agrarian landholdings, another data point highlighting the unequal distribution of public land in the Legal Amazon.

The deficiencies in the SNCR led to the development of parrallel cadasters. The national tax authority relies on the Cadastro Fiscal de Imóveis Rurais (CAFIR). This database does not incorporate spatial attributes but does include large and mid-scale landholders who register in the system to pay taxes and, in the process, further legitimatize their holdings. In 2015, the government moved to unite the SNRC and CAFIR into a single registry: the Cadastro Nacional de Imóveis Rurais (CNIR). Presumably, this is part of a broader strategy to improve tax collection, but like the CAFIR, the CNIR will include both proprietários and poseidueros. The CNIR will not issue a certificate of title regularization (CCIR), which will remain the responsibility of INCRA; however, the CNIR will generate a document to be required for future property transactions which, if so, will effectively function as a type of deed. Although authorized by legislation in 2001, the consolidation of the CNIR has taken on new impetus since the election of Jair Bolsonaro, and all landholders have been instructed to register by the end of 2022.

Another parallel land registry is the Cadastro Ambiental Rural (CAR), created in 2009 as part of Plano de Ação para a Prevenção e Controle do Desmatamento na Amazônia Legal (PPCDAm), a highly successful cross-sectoral strategy to combat illegal deforestation.

Registration in the CAR is obligatory but, in order to ensure its success, authorities and private sector stakeholders created multiple incentives to promote participation. Positive incentives include access to subsidized credit and the provision of technical assistance. Negative incentives include barriers for the commercialization of crops and livestock that are enforced by commodity traders and meatpackers. Companies use the CAR to monitor deforestation and (allegedly) exclude producers who illegally clear forest from their supply chains. Agrobusiness has aggressively promoted the CAR as a key component in its strategy to protect Brazil’s overseas markets from consumer boycotts. Unfortunately, land grabbers are attempting to use the CAR to establish documentary history to support fraudulent claims, a strategy that may succeed, considering the Bolsonaro administration’s support for expanding the agricultural frontier.

As a cadaster, the CAR has avoided the pitfalls of SNCR by accepting registration of all landholdings regardless of legal status and by ignoring conflicting land claims. Participants are expected to conform to environmental regulations; however, inscription provides a flexible (open-ended) pathway for coming into compliance with the Forest Code. Consequently, the response of landholders has been overwhelming, and the CAR provides an alternative depiction of the number and location of all land claims.

The massive gap between the CAR (755,000 landholdings) and SNCR (135,000 landholdings) shines a spotlight on both the dysfunction and inequity in INCRA’s programmes to formalize land tenure. The technical tasks associated with verifying the legal and geospatial attributes of a landholding require the services of a professional surveyor. Large-scale producers have self-financed this process because they can, but smallholders of limited means must wait until INCRA organizes a campaign in their municipality. The dysfunction is evident in the municipality of Ariquemes (Rondônia), where hundreds of landholders lack CCIRs, even though the region was settled in the 1970s and 1980s.

“A Perfect Storm in the Amazon” is a book by Timothy Killeen and contains the author’s viewpoints and analysis. The second edition was published by The White Horse in 2021, under the terms of a Creative Commons license (CC BY 4.0 license).

Read the other excerpted portions of chapter 4 here:

To read earlier chapters of the book, find Chapter One here, Chapter Two here, and Three is here.