Brazil’s Landless Workers Movement sets sights on entering the capital market

RIO DE JANEIRO, BRAZIL – The world’s largest social movement wants to plant its flag in the Mecca of capitalism: capital markets. The red banner of the Landless Rural Workers Movement (MST), with the Brazilian flag on a white background representing peace conquered through social justice, with a woman and a man holding a machete – symbol of work, struggle, and resistance in the countryside -, will now also flutter on investment portfolios.

The MST plans to raise R$17.5 (US$3.4) million by issuing a Certificate of Agribusiness Receivables (CRA), a type of fixed income bond used to finance a producer or agricultural cooperative, backed by the real economy, that is, production itself. In practice, people interested in financing the movement’s activities can buy the bonds and will have as return a pre-fixed remuneration of around 5.5% per year, paid with the profit from the sale of agricultural products – more than savings accounts, which yielded only 2.11% between January and December of 2020, for instance.

All over the world, initiatives for a conscious capitalism, a concept that makes many leftist progressives frown, are gaining strength as allies in the fight against poverty and social inequality. Democratizing and diversifying investments is one of the ways to fight the concentration of money in the hands of a few, argue those who believe in the initiative.

The MST’s public offering will accept investments starting at R$100. These are 5-year bonds, exempt from income tax, and can be traded in the São Paulo Stock Exchange’s (B3) secondary market, depending on their liquidity.

This is not the first time that the movement explores this financing alternative, considered more attractive than traditional (and bureaucratic) bank loans, but which until recently was a privilege of large producers. Last year, the MST raised R$1.5 million in a private offer for the completion of a processing plant for the Nova Santa Rita Agricultural Production Cooperative (Coopan), in Rio Grande do Sul.

This cooperative was legally founded in June 1995 and currently includes 29 families and 80 members (40 adults, 40 youths), producing mainly organic rice and pork, but also milk, baked goods, and other items for domestic consumption.

Now the goal is more ambitious: to fund the production, mostly organic, of rice, corn, milk, soy, grape juice and brown sugar of 7 cooperatives – Coana (231 families involved in production), Coapar (455), Coopaceres (39), Cooperoeste (1700), Cootap (609), Copacon (350) and Copavi (138) – located in MST settlements in the states of São Paulo, Mato Grosso do Sul, Paraná, Santa Catarina and Rio Grande do Sul. MST was unable to grant an interview because it is in a period of silence, when media statements that could influence potential investors are banned.

The CRA issue will be conducted by Gaia Impacto, the securitization company in charge of converting the rural product certificates, issued by cooperatives, into securities (CRA). However, the strategy is part of a broader fundraising effort called Finapop – Programa de Financiamento Popular da Agricultura Familiar para Produção de Alimentos Saudáveis (Family Farming Popular Financing Program for the Production of Healthy Food).

Conceived in partnership with leftist economist and ex-banker Eduardo Moreira, Finapop is inspired by international initiatives aligned with the principles of the search for an ethical and sustainable economy. Interested parties will be able to reserve their shares as of July 26, at broker Terra’s website, or register at Finapop’s website. “The website has received almost 4,000 messages from people who want to be notified when new operations begin,” Moreira says.

“Finapop is an idea, a desire, which is based on the principle of knowing what our savings are financing. We might be financing [arms manufacturer] Taurus when we are pacifists. Financing [meat packing giant] JBS when you are vegan; or [mining company] Vale when you are an environmentalist. Why not finance the world we believe in?” Moreira argues. The economist also believes that the issue will also have an educational role: to show people that the MST’s agricultural cooperatives comply with all legal requirements to meet the financial market’s demand.

“In this capitalist world, where the market is an almost sacred entity, people will see that they have no reason to hate the MST,” he says.

Moreira is a critic of the capitalism model that gained momentum in the 1980s with the deregulation of markets and that today is undergoing a moment of revision. “The 1980s experience showed a sequence of unprecedented crises. I am not an enthusiast of the present capitalist system, but we are unlikely to get rid of it. That is why we have to limit greed, which undermines productivity and concentrates political power in the hands of a few,” says the economist, who is not alone in this crusade.

It is worthrecalling the quote from conservative Nicolas Sarkozy, who, amid the 2008 international financial crisis, proclaimed the end of self-regulation. “We need to refound capitalism (…) because we are two fingers away from catastrophe,” said the then French president.

Depending on how the MST initiative will be received by investors, there is a whole potential universe of family farmers who may be interested in closer ties with the capital markets. The MST comprises 160 cooperatives and over 1,000 associations, with 450,000 families in 24 states. Many of these cooperatives have been exporting products such as rice, juices, beans, coffee, and sugarcane derivatives since the 1990s, to countries in Latin America, Europe, and Asia.

It was also during this time that cooperatives began to develop large-scale agroindustrialized products, which are now sold in local trade fairs and municipal markets, particularly in southern Brazil and São Paulo. The cooperatives also supply over 200 municipalities through the National School Meals Program, as well as military barracks, prisons and hospitals. And it has been developing its own distribution network, the Armazém do Campo stores, which serve an average of 21,000 people monthly, as a way to circumvent the resistance of large supermarket brands.

The MST’s incursion into the financial market comes at a time of extreme hostility in Brazil towards rural social movements. Jair Bolsonaro was elected in 2019 reiterating the discourse that he would deal with the movement for agrarian reform as a “terrorist organization.” In practice, this is what happened.

Data from the Roman Catholic church’s Pastoral Land Commission (CPT) show that in the year 2020 cases of pistol whipping, expulsion, eviction, threat of expulsion, threat of eviction, invasion, destruction of fields, houses and property in the countryside broke the historical series record that began in 1985.

There were 2,054 violent incidents, an 8% increase over 2019, with 1,576 instances of land conflicts – a daily average of 4.31 conflicts and a 25% increase over 2019. These conflicts involved 171,625 families in the midst of the coronavirus pandemic. Among indigenous peoples alone there were 656 instances (41.6% of the total), with 96,931 families (56.5%) involved.

“To the deadly virulence of the plague, deadly violence was added, endorsed by the State’s omission and connivance,” says the CPT in its annual report. Of the total number of conflicts, 62.5% occurred in the Legal Amazon, comprising all states in the North region, as well as part of Maranhão and the state of Mato Grosso. The region is experiencing a dismantling of public policies at a time when deforestation data are breaking records.

In June alone, the Amazon registered the highest number of fires in the past 14 years for the period, 2,308, according to INPE (National Institute for Space Research). The CPT also registered the murder of 18 people in rural conflicts last year, 7 of whom were indigenous. Another 35 people suffered murder attempts (12 indigenous) and 159 were threatened to death (25 indigenous).

“The CPT’s 2020 conflict report shows that today’s Brazil is closer to 1500 than to 1988. In several regions of the country, indigenous people, landless rural workers, quilombolas, riverine communities, geraizeiros (traditional population from northern Minas Gerais Brazilian savannah), artisanal fishermen, vazanteiros (tidewater settlers), and peasants are victims of criminalization processes on account of their struggles, especially for land and water,” says Deborah Duprat, attorney and retired federal Deputy Prosecutor General.

The CPT registered 84 cases of criminalization of reform movements in 2020, which targeted landless people (40), settlers (24), and quilombolas (9).

Source: El Pais