The adage ‘possession is nine-tenths of the law’ is not legally true, but the concept reigns supreme on frontier landscapes in the Pan Amazon. Land grabbers and peasant pioneers share a modus operandi: they occupy land that does not belong to them.

Historically, this process was condoned by the state, and conflict occurred only when the two groups competed for the same territory – or when either group sought to steal land from forest communities. Smallholders have the advantage of numbers, while land grabbers use their political connections to formalise their claims and label their competitors as ‘squatters’. In Brazil and Bolivia, ranchers use force to clear landholdings, usually by hiring thugs to beat the smallholders and destroy their belongings. The smallholders resist by organising themselves into peasant syndicates associated with the Movimento Sim Terra (MST) and the Confederación Sindical Única de Trabajadores Campesinos de Bolivia (CSUTCB). Resistance leads to an escalation of violence.

In Brazil, criminal land grabbers contract pistoleiros to murder posseiros who stand in their way. The most famous incidents have involved activists who were assassinated for defending the rights of forest people and smallholder peasants, most notably Francisco Alves (Chico) Mendes, who was ambushed at his home in Xapuri, Acre, in 1988; and Dorothy Stang, who was executed in 2005 on a remote road near Anapú, Pará. These crimes led to high-profile public prosecutions and the incarceration of the men who pulled the trigger, as well as the ranchers who contracted their services. Unfortunately, it is more common for these mafia-style murders to remain unsolved and, even when identified, most perpetrators escape justice – the exact definition of impunity.

The Comissão Pastoral da Terra (CPT) has monitored rural violence in the Brazilian Amazon for more than four decades and has compiled a gruesome historical archive: Massacres no Campo lists 47 incidents and details the murder of 341 individuals. More than half are identified as ‘leaders’ and more than 70% are linked to disputes over land tenure between large-scale landholders and landless peasants. That total vastly underestimates rural violence, however, because it only includes clashes where at least three people died.

Since 2011, the CPT has compiled more precise statistics that reveal that little has changed and the situation may be getting worse. In 2017, there were more than 980 separate incidents impacting more than 98,000 families; 56 people were killed, mostly landless posseiros occupying ranches deemed vulnerable to an organized occupation.

The ongoing closure of the forest frontier has increased the pressure on consolidated landscapes in Southeast Pará and Southern Rondônia, where a new militant organization, the Liga de Camponeses Pobres (LPT), has tapped into the discontent engendered by the inequities of land distribution. Large landholders increasingly use private security forces and police to enforce judicial evictions. The involvement of police, however, is no guarantee of a just or orderly process, as revealed in 2017 at the Fazenda Santa Lucia in the municipality of Pau D’Arco (Pará) where seventeen police officers were accused of executing ten posseiros in a court-ordered eviction process. The most lethal municipalities are Anapú, Pará (16 dead), Vilhena, Rondônia (13 dead), Colniza, Mato Grosso (11 dead), Pau D’Arco, Pará (10 dead) and Porto Velho, Rondônia (10 dead).

Although posseiros suffer the most violence, Indigenous communities continue to be attacked on frontier landscapes where land grabbing is most prevalent, particularly along BR-163 in Pará and BR-230 in Amazonas. Communities suffering the highest levels of violence are in the heavily deforested regions of Maranhão, where nineteen Indigenous men and women died while protecting their reserves from timber thieves. Not even remote Indigenous reserves are immune from violence, particularly the Munduruku and Yanomami communities, which must contend with the notoriously violent wildcat gold miners.

The plight of lowland Indigenous communities in Peru and Bolivia is both more acute and very different when compared to Brazil. Although their national governments profess to support the territorial claims of native people, they have deployed security forces to violently suppress Indigenous groups when they protest policies that threaten their territories. In 2009, the administration of Alain Garcia enacted laws that would have created a pathway for the privatization of native landholdings. The resulting campaign of civil disobedience ended in a violent confrontation and the deaths of 33 individuals. A similar skirmish occurred in Bolivia in 2011 when the government of Evo Morales attempted to obstruct a march protesting the construction of a highway through the Territorio Indígena y Parque Nacional Isiboro Securé (TIPNIS). Nobody died, but police beat and arrested dozens of men and women in a flagrant violation of their civil rights.

Less newsworthy but more insidious are the invasions of communal landholdings adjacent to colonization zones, usually by highland indigenous migrants who enjoy the tacit support of their national and regional governments. In Bolivia, this is portrayed as agrarian reform by the central government, which is distributing public land to settlers and land grabbers in the forests of Chiquitania and Guarayos. In Peru, native communities are struggling to protect their communal landholdings from wildcat gold miners and illegal loggers operating with the collusion of regional authorities. At least 22 indigenous leaders have been assassinated since 2013; more than half were threatened prior to their murder and had requested protection from police.

The forest frontier in Ucayali and Huánuco (HML #40) is particularly dangerous due to the presence of criminal gangs dedicated to the production of cocaine, who have targeted leaders of the Cacataibo and Shipibo—Conibo ethnic groups. As of March 2021, none of the assassins had been apprehended by the police, allegedly due to the complicity of local authorities in the production and commercialization of illicit drugs.

Violence and murder are endemic to the Colombian Amazon due to decades of civil war and an economy based on the production of illicit drugs. The peace process has brought an end neither to armed conflict nor to the scramble for land. Criminal gangs composed of ex-combatants now fight for control of the borderlands between Caquetá, Meta and Guaviare. The central government has been unable to assert control, and competing bands recruit peasants to clear the forest to establish coca fields and cattle ranches. There are no specific statistics on land-related violence but, presumably, it is a major cause of death in a region where the overall murder rate (32 per 100,000) is among the highest in the Americas.

Rural Real Estate Markets

Mark Twain once said, ‘Buy land, they’re not making it anymore’. Samuel Clemens was a literary genius, but he was a notoriously poor investor. Nonetheless, his observation on the intrinsic value of land is inherently true and explains, in part, the scramble for land in the Pan Amazon. Settlers, investors and politicians all know that the distribution of public lands will eventually end. The appropriation of public land no longer occurs on the consolidated frontiers, but it continues to plague the margins of agricultural frontiers and is the defining characteristic of forest frontiers. The ongoing creation of new landholdings, legal and otherwise, on the forest frontier impacts the price of land in more settled landscapes. Simultaneously, the demand for arable land in consolidated municipalities inflates the value of holdings on adjacent landscapes. Rural real estate markets reflect the dynamic of supply and demand across the entire development frontier.

In remote corners of the forest frontier, newly created homesteads and their associated land claims are typically hard to sell. Transactions are loaded with risk due to the dubious nature of deeds and the potential for squatters to invade properties. Risk is amplified by the threat of violence because settlers and land grabbers employ force to protect their claims. Both sell their land to risk-tolerant investors and later migrants and, in the process, create the market for rural real estate. Prices are low and rise slowly, but early-stage participants are confident that the region will eventually evolve into an agricultural frontier and reward them for their audacity and disregard for the law.

Properties on agricultural and consolidated frontiers are more valuable because of improved infrastructure and better access to markets. They also are located on landscapes with a more mature legal status, where holdings have been transformed into ‘safe’ investments. The jeopardy from bad papers has not disappeared, but due diligence and preventative legal action can mitigate the risk. More importantly, conventional production systems generate cashflow and a decent return on investment.

Land investment must be viewed in the context of the domestic economies: all Amazonian nations have suffered severe bouts of hyperinflation within the living memory of anybody older than fifty. Capital invested in landholdings might be illiquid during times of crisis, but it always recovers its value. The same cannot be said for savings held in bank accounts or stock markets subject to erratic, often confiscatory, government policies. The return on real estate is the best option for most Latin American investors

In Iberian cultures, a predilection for land also has strong cultural appeal, which motivates urban professionals to invest in rural properties. In Brazil and Bolivia, this is manifest in an avocation for estancias or fazendas that raise cattle, while in Peru, Ecuador and Colombia urban investors are attracted to fincas that grow coffee, cacao or oil palm. Absentee landlords, including physicians, lawyers and other professionals, are attracted by the appreciation and the preservation of capital, but they also bask in the prestige of being a farmer or rancher.

The connection between city and countryside includes working-class families whose forebears settled smallholdings in Rondônia and Pará or one of the colonization zones in the foothills of the Andes. As they have in rural families everywhere, younger generations have migrated to the cities while keeping their attachment to the family homestead. Money flows in both directions: towards urban dwellers attending school or seeking medical attention but also back to the farm as a remittance that can be used to invest in land, livestock and plantations. Successful families expand their holdings by buying adjacent parcels or by appropriating more land from the forest estate. Land tenure maps show hundreds of thousands of small plots, but an individual family often owns multiple parcels. Small farms tend to be unviable, at least with conventional production models, and consolidation is a market-based cure for unviable settlement policies.

Savings and investment by professional and working-class families is a factor in the appreciation of rural real estate and, indirectly, a driver of deforestation. A more immediate economic force causing the appreciation of land values is the extraordinarily lucrative business model pursued by industrial agriculture.

The impact of this type of agricultural production on land values is most evident in Mato Grosso. In 2019, mean land values in the municipalities dominated by massive corporate farms were about R$ 12,000 ($2432.3) per hectare (Parecis). In contrast, properties in the northwest corner (Noroeste), where timber extraction and cattle raising predominate, had a mean value of R$ 3,100 ($628.34) per hectare. In both regions, however, the price of land has exploded over the last twenty years with reported increases in market value between 2,500% (Noroeste) and 3,500% (Parecis). This level of asset appreciation is equivalent to the increase in the average value of farmland in the US Midwest between 1900 and 2000 – a century of growth in only 20 years! Increases in valuations at this rate are often indicative of a market bubble. Perhaps. The recently reported gains in three of the sample regions (Sudeste, Oeste and Norte Araguaia) are occurring on landscapes considered to be expansion zones and are overpriced, at least when compared to the farmland in the original soy belt (Parecis and Centro). Market corrections are evident in the decrease in valuations between 2015 and 2019 in the northern expansion zone (Norte), which experienced a surge in prices simultaneous with the paving of BR-163 (see Chapter 2). Regardless, land in central Mato Grosso ($US 3,000 per hectare) is still affordable when compared to other regions that produce soy and maize, such as Paraná ($US 8,000 per hectare) and Iowa ($US 18,000 per hectare).

The appreciation of land is a core component of the business model of cattle ranchers across the Southern Amazon. Many operate on relatively thin margins that cause them to overgraze pastures and degrade soils; many have expanded operations by clearing small patches of forest annually over many years. The opportunity to sell can be a windfall. For example, a middle-class rancher in Alta Floresta with a 1,000-hectare property valued in 2000 at approximately R$ 300,000 ($US 190,000) could potentially sell that property in 2020 for R$ 5.7 million (~$US 1.1 million). The capital gains would be roughly equivalent to his net earnings over that same twenty-year period (see Chapter 3). After paying a capital gains tax, the rancher would have ample resources for a comfortable retirement or could avoid paying capital gains tax by purchasing another landholding. One option might be to buy a ranch on a forest frontier where land values remain affordable.

The appreciation of land creates positive feedback loops that benefit large-scale agriculture. Consider an agribusiness corporation with landholdings of 100,000 hectares (247,105 acres) operating in central Mato Grosso. The capital appreciation between 2000 and 2019 would surpass $US 250 million. Although the increase in value might not be monetized via a sale, its book value would be incorporated into a corporate balance sheet. Strong balance sheets are at the core of corporate finance because they reduce the cost of credit and attract new equity investors. Approximately ten per cent of the private landholdings in Mato Grosso (15,000 properties) encompass seventy per cent (46 million hectares or 113.7 million acres) of the total area allocated to private landholdings (67 million hectares or 165.5 million acres). The appreciation in the value of those properties would sum to between $US 83 and 100 billion; that value, however, is dwarfed by the capital gains enjoyed by the plutocrats who acquired their properties at virtually no cost in the 1970s

The increase in the cost of land has motivated agroindustry to develop alternative financial models for accessing land. Joint ventures between farmer-entrepreneurs and landholding ranchers are now common. The most common type of joint venture is a lease negotiated in terms of sacos de soja (soy bags). This stratagem mitigates risk from volatile commodity markets and exchange-rate fluctuations that can wreak havoc on a business enterprise with fixed costs measured in local currency. If the price of soy falls or the Brazilian currency weakens, the farmer is not locked into a contract based on a fixed monetary amount but instead shares the reduction in diminished revenues with the landholder. Ranchers can afford to be flexible because even reduced revenues are better than the proceeds from conventional beef cattle operations.

Ranchland is at a premium because sustainability protocols adopted following the Soy Moratorium limit the ability of landholders to convert native forest. This has inflated the value of pastures, including those adjacent to existing production landscapes, as well as those in more remote areas or along transportation corridors. Even highly degraded soils, the product of decades of overgrazing, can be attractive to a soybean farmer because the application of limestone (CaCo3) or gypsum (CaSO4), used to ameliorate soil acidity, also resolves the loss of fertility that limits the stocking rates of degraded pastures. Sophisticated farmers deploy technology to micromanage plant nutrient levels and use minimum tillage technology to rebuild soil organic matter; consequently, they view topography, soil texture and previous land use to be more important than the nutrient status of potential farmland. Essentially, ranchers are being paid to restore their degraded soils.

The interactions between ranchers and farmers are pulling more ranchland into the soy-maize production system, either permanently or periodically. Simultaneously, industrial farming is expanding onto municipalities in Rondônia, Pará and Tocantins. Even remote landscapes are being impacted, including in southeast Amazonas, Roraima and Amapá, where soy is being cultivated on savanna landscapes and previously deforested landholdings. The economic boom in agroindustry is impacting the value of land across the entire region.

“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:

See related coverage here at Mongabay:

Deforestation in the Brazilian Amazon falls 22% in 2023

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