RIO DE JANEIRO, BRAZIL – In total, over half (55%) of Brazilians suffered from some type of food insecurity (severe, moderate or mild) in December 2020, according to a survey by the Brazilian Research Network on Food and Nutritional Sovereignty and Security (Rede Penssan).
The survey was conducted by the researchers who approved the Brazilian Scale of Food Security used by the Brazilian Institute of Geography and Statistics (IBGE), in order to follow up on the government agency’s surveys, conducted every four years as part of the National Household Sample Survey (PNAD) and the Family Budgets Research (POF).
Performed in 1,662 urban and 518 rural households, the survey provided these figures before the inflationary spike of recent months – which is likely to have worsened the situation.
In September, the IPCA (Extended National Consumer Price Index) for food, which shows the percentage of items with increases, stood at 64%. in 2019, when inflation was less than half of the current rate, the food index was just over 50% – which did not limit the option for product substitution as much.
According to a Datafolha survey for the Brazilian Consumer Defense Institute, since the beginning of the pandemic Brazilians have been eating more ultra-processed and cheap foods. Adults in the 45 to 55 age group increased this type of consumption the most, from 9% to 16%.
IBGE data show that food insecurity had been dropping in Brazil since 2004, but increased again in all its forms from 2014, in the wake of the sharp 2015-2016 recession, which shrank GDP by 7.2%.
Since then, with Brazil undergoing an acute fiscal crisis, pandemic and the government deteriorating, the average economic growth has been mediocre.
In this scenario, the creation of informal and worse paid jobs prevails and has flattened the income of the poorest. In their households, virtually all their income is spent on food, transportation, and housing.
According to FGV Social, since 2014, real per capita household income from labor has dropped from R$249 (US$45) per month to R$172, on average, in the poorest half of Brazil. Since this is only labor income, many of these households may have other sources of income, such as Social Security or “Bolsa Família” (Family Grant) – but the drop reflects the size of the budget squeeze in recent years.
Official accumulated inflation between late 2014 and last September reached 47.5%; and the value of the dollar more than doubled, with direct impact on food prices and production costs, such as imported fertilizers.
Although Brazil is one of the largest global producers of soy, meat and corn, these products are commodities with prices negotiated in dollars – the currency in which many wealthier Brazilians have taken refuge in this time of political, economic and fiscal uncertainty, thereby pressuring its rate.
When the dollar rises, commodities become more expensive, due to the increase in the price of the American currency and the internal decrease in the supply of products, which are then exported in larger quantities.
In the poorest regions of the North and Northeast, hunger (serious insecurity) affects 18% and 14% of households, respectively, compared to the national average of 9%. In the Midwest, a hub of agribusiness production, over 1/3 of families suffer from mild insecurity.
“Even before the survey, we expected the situation to worsen. But not this deep,” says Renato Mafuf, coordinator of the Penssan Network, which will repeat the survey this year, expanding it to almost 7,000 households.
Maluf says that if on the one hand the pandemic has abated and is allowing the return of informal work, increasing income somewhat, inflation has accelerated since the end of 2020, preventing significant progress in the food conditions of the poor.
United Nations World Food Programme’s Daniel Balaban says that, contrary to many African countries, Brazil has not promoted changes in its tax structure, which is too burdensome on consumption with taxes such as ICMS (state-level sales tax).
The tax reform under discussion in Congress is not expected to change this. According to the Brazilian Institute of Tax Planning, the tax burden on food in Brazil is equivalent to 22.5%, compared to 6.5% on the world average.
“Taxation on consumption is one of the most unfair, because the poor use up all their income on a daily basis. We have to change this, so that the wealthiest contribute more through income tax,” Balaban says. “When we argue that, we don’t want everyone to be equal, but that no one should die of hunger.”
The UN representative advocates that Brazil follow the example of other countries that have made progress in fighting hunger by expanding credit to small and medium-sized food producers.
In September, President Bolsonaro vetoed a bill that created measures to support family agriculture until December 31, 2022, with the transfer of up to R$3,500 per family benefited by the Emergency Incentive for Rural Productive Inclusion. The government justified the veto saying that the proposal did not include an “estimated budgetary and financial impact.”
According to FGV Social director Marcelo Neri, food insecurity has closely followed the variation in extreme poverty, which is also increasing, and the reduction in social spending.
“While the period between 2004 and 2013 was marked by the expansion of targeted cash transfer programs, in more recent years we have made a fiscal adjustment on the poor, thinning the Bolsa Familia,” he says.
Having worsened every year since 2014, extreme poverty in Brazil (per capita household income below R$261, by FGV Social’s criteria) now reaches 27.4 million people.
Along this path, the latest adjustment in the average value of Bolsa Família benefits occurred in July 2018. Since then, the official inflation measured by IPCA has accumulated a rise of 18% – even higher for low-income people.
At the start of the Bolsonaro government, the value of the basic food basket in São Paulo as estimated by Procon-SP and DIEESE was equivalent to 71% of the minimum wage. By late August it had reached 98%. In the period, the products in the basket increased by 52%. The minimum wage, by 10.2%.
Targeting the 2022 election, Bolsonaro now wants to change the Bolsa Familia, which would be called Auxílio Brasil (Brazil Aid), would include more beneficiaries, and would have an average value of R$300, instead of the current R$190.
In addition to the increase in food insecurity, high unemployment and the drop in income in recent years have led to an explosion in the number of favelas in Brazil. In 10 years, they have more than doubled in number and presence in Brazilian cities.
According to IBGE estimates, the total number of “subnormal settlements” (favelas, palafitas, etc.) jumped from 6,329 in 323 municipalities to 13,151 in 734 cities from 2010 through 2019.
Characterized by an irregular urban pattern and lack of basic sanitation, housing in these conditions increased from 3.2 million to 5.1 million in the period.
The 2010 data are from the Census and for 2019 were estimated by IBGE itself to subsidize the operation of the next Census, in 2022, and distribute the work to census takers.
According to these projections, 1 in 4 of these precarious homes is in the states of São Paulo and Rio de Janeiro; but the proportion is much higher in capitals such as Belém (55.5% of the total residences), Manaus (53%), and Salvador (42%).
In addition to living precariously, these residents suffer from a kind of urban segregation and “zip code prejudice,” which leads delivery and app transportation companies not to operate in these communities, where the supply of public services is also precarious.
“Brazil is becoming a country bordered by favelas. What we can’t do is reach a point of no return, although this is not far off,” says Edu Lyra, former favela resident and founder of the Gerando Falcões Institute, an NGO focused on the social promotion of children and adolescents.
The Brazilian “favelaization” has grown despite the fact that the “Minha Casa Minha Vida” (My Home My Life) program built about 5 million houses between 2009 and 2018, when it began to be reduced.
In total, some R$230 billion in direct subsidies and FGTS resources were allocated to the initiative. But the program’s speed has not kept up with the economic crisis and inflation, which have impoverished society.
According to the João Pinheiro Foundation, the Brazilian housing deficit in 2019 reached 5.8 million dwellings. This total included about 3 million units where families lived committing more than 30% of their income to rent -the so-called “excessive burden.” With the pandemic and the increase in unemployment, favelas gained ground, with more people looking for cheap housing.
In Jardim Julieta, in São Paulo, an MTST (Homeless Workers Movement) settlement started in 2020 and had planned lots of 4.5 x 9 meters. But demand was such that they were shrunk to 4.5 x 4.5 meters to accommodate more families.
With Bolsonaro replacing the program with Casa Verde e Amarela (Green and Yellow House), the new program is now suffering from a lack of resources and currently has approximately 1,600 projects in progress, according to the Ministry of Regional Development, with a forecast of 230,000 units to be built.
For Ana Maria Castelo, a specialist in civil construction at the Brazilian Institute of Economics of the Getulio Vargas Foundation (Ibre-FGV), while it lasted, the program was important because its budget was predictable, enabling construction companies to develop methods and technology to massify and cheapen construction.
“From now on, it will be very difficult for a similar program to have sufficient resources to give continuity to a sustained reduction in the housing deficit,” Castelo says.