Brazil has the ninth largest GNP in the world and among the most unequal distributions of wealth — and land — in the world. Brazil's current president, Fernando Henrique Cardoso (FHC) perhaps put it best: "Brazil is not a poor country, it is an unjust one." Social movements, the government, and the [World] Bank in principle agree that the redistribution of land is an urgent necessity for addressing rural poverty.

Current law regulating land reform in Brazil (the Estatuto da Terra of 1964) was authored at the outset of Brazil's military dictatorship, based in the understanding that massive concentration of landholdings not only contributed to rural poverty but froze potentially productive assets and hindered development. The law established that the federal government could expropriate unproductive or over-large landholdings (latifúndia) for the purpose of land reform, and indemnify the owners with government bonds. The political power of Brazil's large landowners, however, effectively precluded significant action on land reform during the military dictatorship. When the military stepped down and were succeeded by an indirectly elected President in 1985, the civilian government announced an ambitious goal of settling 1.4 million families on 43 million hectares over four years. Only a fraction of this objective was attained — some 82,000 families were settled on 4.3 million hectares by 1989.

By the mid-1990s, however this picture would change dramatically. While World Bank descriptions of the Cédula da Terra belabor the need to make land reform quicker and cheaper than the Constitutionally mandated expropriation/indemnification mechanism, in reality both expropriation of unproductive areas, and settlement of landless families accelerated dramatically after 1994. The National Institute for Agrarian Reform and Colonization (INCRA) under the current government prides itself on having provided land to 372,866 families on over 8 million hectares between 1995 and 1999, over half again as many as the 218,000 families given land in the entire preceding 30 years since the promulgation of the Land Statute. President Fernando Henrique Cardoso's four-year goal announced in 1995 was met and exceeded. The principal cause of this leap forward in land reform, is the mobilization of the Landless Rural Workers' Movement (Movimento dos Trabalhadores Rurais Sem Terra — MST) and allied organizations (the National Confederation of Agricultural Workers — CONTAG — and others.)

Starting in southern Brazil in the mid-1980s, MST built a grassroots movement of the rural poor and landless, drawing on the desperation of those marginalized in the consolidation of large scale capital-intensive export agriculture and displaced by large scale infrastructure projects. The MST was able in various specific instances to contest the seemingly insurmountable political power of large landholders through the confrontational tactic of land occupation. Local groups would identify lands qualifying under the law for expropriation and dozens or hundreds of families would move in together, set up makeshift encampments and begin to farm. Growing numbers of MST adherents assembled in tent cities along roads and highways, planning new occupations. Confrontations with landowners, their hired guards, and the Military Police proliferated, as did groups identified with the MST, with varying degrees of relationship to the national coordinating body. In 1995 in Rondonia and 1996 in Pará, landless groups were massacred by military police sent to prevent or expel occupations. With a frankly leftist political orientation, the movement soon became identified as the most dynamic opposition to the FHC government, all the more clearly as MST groups repeatedly occupied INCRA offices to force negotiation or action on expropriations. MST marches and demonstrations regularly mobilized tens of thousands of people, even by the government's count.

The federal government was faced with a serious dilemma. On the one hand, MST direct actions generated highly visible conflicts and pressure to act on the government, and the President's, repeated commitments to social equity. On the other, the government's major parliamentary coalition partner, key to the passage of its economic reform program in the Congress, the conservative PFL (Liberal Front Party), includes most of the representatives of the landed elite. That INCRA settled more families between 1995 and 1998 than in the preceding 30 years was politically costly, controversial within the ranks of the government's parliamentary coalition, and could not have occurred without the continual, large-scale, public pressure applied by the MST strategy of land occupations. Unsurprisingly, while government has often negotiated with MST leadership, locally and nationally, it has as often denounced the movement as irresponsible, politically motivated, violent, given to illegal methods, and has brought a series of legal charges against leaders at various levels. The government and the MST are political adversaries.

Regardless of the view one takes of the MST or the strategy of land occupation as a means of achieving government action on land reform, it is indisputable that the movement has been the driving force behind the advances in land reform via expropriation that have taken place in the 1990s. Bank staff themselves have noted that it is owing to the mobilization of the MST that there is a land reform process occurring in Brazil for the bank to support.