STF makes a “socialist” reading of the right to rural property

The ministers of the Federal Supreme Court (STF) adopted a “socialist” interpretation of article 185 of the Federal Constitution, contradicting the text that expressly states that productive properties “are not susceptible to expropriation for the purposes of agrarian reform”.

The STF judged a Direct Unconstitutionality Action (Adin) filed by the Brazilian Agriculture and Livestock Confederation (CNA) against sections of the Agrarian Reform Law (Law 8,269/1993). For the CNA, the complementary law confuses concepts of land use and efficiency of its exploitation, ending up giving equal treatment to productive and unproductive properties.

Unanimously, the ministers decided that private property, even productive, can be subject to agrarian reform if it does not fulfill its social function. The innovation in understanding is based on a reinterpretation of the sole paragraph of the same article 185, which states that “the law will guarantee special treatment to productive property and establish standards for compliance with the requirements relating to its social function”.

According to the Agrarian Reform Law, the social function is fulfilled when the rural property simultaneously meets the following requirements: rational and adequate use, adequate use of natural resources, compliance with labor legislation and exploitation that favors the well-being of the owners and workers.

Subjective criteria weaken the right to property

For lawyers and jurists linked to the agricultural sector, the STF placed subjective criteria ahead of the main issue, which is land productivity.

“Adopting social function as a criterion for expropriation is something subjective, as is the anthropological report of indigenous areas, quilombolas and traditional communities. It is too insecure from the point of view of legal objectivity”, says lawyer Samantha Piñeda, a specialist in Socio-Environmental Law. “If I want, I can enter any rural property and find an environmental problem. Imagine if this is a criterion for expropriation, we are dead”, she adds.

In the assessment of Renato Buranello, from VBSO Advogados and president of the Brazilian Institute of Agribusiness Law (IBDA), the STF’s decision has the potential to create an environment of instability and legal uncertainty, with harmful effects on productive activity in the country.

“There is a lack of guidelines, for example, on what would be a rational and adequate use of the property”, says Buranello. For the jurist, a space was created for a purely subjective interpretation of what constitutes inappropriate use in relation to environmental legislation, even when there is no proven violation of the law and actual damage to the environment.

Likewise, the criteria for favoring the well-being of owners and workers would be very generic. “There is an interpretative power that can lead to the perception of a subjectivist nature of the effective fulfillment of the social function of property”, he highlights.

The rule must be the protection of property, says jurist

What the STF did, according to jurist Daniel Vargas, professor at FGV and doctor in Law from Harvard University, was to reverse the logic of the constitutional system.

“The social function criteria set out in the Constitution are guides and limits for this exceptional intervention by the state. The rule is private autonomy. The exception is public interference. The rule is the protection of the owner. The exception is lifting the ‘veil of property’ to exceptionally assert the public will over the private will. This would only occur if and when the State proves specific violations of social function requirements,” he argues.

In practice, however, the ministers reversed the reading of the constitutional precept, placing what was accessory as more important, and what was main as secondary.

This understanding had already been discussed by jurist Ives Gandra Martins, mentioned in the vote of the case rapporteur, minister Edson Fachin. When analyzing the topic, Gandra Martins noted: “Productive property is not subject to expropriation, and if it is not fulfilling its social function, the law will determine the requirements for it to fulfill it. Such exegesis is the only one possible. Admitting that productive property could be expropriated if it did not fulfill its social function is to make it identical to unproductive properties, making the inc. II of art. 185 had absolutely no value.”

Likewise, former STF minister Maurício Corrêa had already stated, in a previous case trial, that the Constitution needs to be read in the literal sense, when it states that productive properties “are not susceptible to expropriation for the purposes of agrarian reform”.

Not doing so, Corrêa pointed out, would be “opening a valve to encourage expropriation, for social interest, of land, which from a constitutional perspective, is not subject to expropriation-sanction, imposing a heavy burden, undue and unconstitutional, to the detriment of the holder of productive lands”.

Fachin invoked text barred from voting on the Constitution in 1988

When justifying his vote, Minister Fachin recalled that in the voting process for the 1988 Constitution there was a highlight in the text that stated that non-compliance with the social function “will allow its expropriation”.

The highlight did not have the necessary 280 votes and was left out of the Magna Carta. Fachin, however, justified that the highlight vote “maintained the openness of the constitutional text”. And he concludes that “the interpreter must choose, among the possible legal interpretations, the one that fits the constitutional text. If it is open, you cannot close it, under penalty of usurping the function of the Legislature”.

“Thus, whether because the Constitution itself required the fulfillment of the social function by productive property as a condition to make it inexpropriatable, or because, while the polysemy of the sole paragraph of art. 185 of the CRFB, the legislator could choose one of the meanings, there is nothing unconstitutional in the law that implements the constitutional command or that opts for one of the possible meanings of the text”, concludes Fachin’s vote.

In October last year, Minister Luís Roberto Barroso had already surprised the country by extending a rule from the Covid pandemic period, determining that judges cannot repossess invaded areas without first passing the matter through a commission of land conflicts.

Series of decisions restricts the right to property

Another threat to property rights occurs with the ongoing vote in the STF on the time frame, which will define the limits of what can potentially be claimed as indigenous land.

On the Executive’s side, President Lula announced last week the demarcation of two indigenous lands in Roraima and a schedule for another six demarcations.

“The way the business is being designed is the perfect plan. They are defending the right to property, relativizing this, they are defending indigenous and quilombola communities, the management of environmental assets – the government is the only chancellor of all this. It’s putting the entire Brazilian environment and the possibility and expropriation of areas on the government’s table”, points out Piñeda.

Parliamentary Agricultural Front promises reaction in Congress

And what is the effect of this? “Giant legal uncertainty, this will cause a rush out of the country by investors who were wanting to invest here. We will certainly have a lot of credibility problems and investment will drop”, concludes Piñeda.

The movements of the Executive and the STF will not go unreacted by Congress, assures federal deputy Pedro Lupion (PP-PR), president of the Parliamentary Front for Agriculture.

“It’s difficult, both the federal government and the STF seem to have focused on destroying and persecuting us. But we will legislate whatever we have to legislate, we will take action and seek solutions for each of these problems. We are extremely attentive to guaranteeing property rights, and, more than that, that the country’s producers are respected for what they do, and not persecuted all the time”, says Lupion.