INTRODUCTION
Brazil’s Rural Social Insurance (Previdência Social Rural), which was expanded and
consolidated by the 1988 Federal Constitution, had a slow and gradual evolution
before it finally established itself as a true guarantor of protection for rural
workers. These workers are subject to much greater social insecurity than urban
workers, who have always had at least some bargaining power through their class
organizations.
Previdência Social Rural is formally a contributory programme. Yet, owing to the
particularities of rural activity, it has contributory rules that are different
from the traditional rules of the urban scheme, which entails a high degree of public
subsidy. The model is geared towards workers who carry out activities particular
to the agricultural sector regardless of whether they reside in rural or urban areas.
Under this regime, the insured include salaried workers and individuals who are
producers as well as individuals in the special insurance category (family agricultural
workers).
Each insured individual receives benefits specific to the contributory rules that
apply to him or her. In the case of individuals under the category of “specially
insured persons”, contributions are collected on the basis of the value of their
commercialized production. This, however, does not prevent them from being able
to contribute voluntarily as individual contributors so as to obtain benefits above
the minimum level. Rural producers who are physical persons contribute to social
security based on the value of their commercialized production – corresponding to
the employer’s quota. Through the individual’s quota, they also contribute based
on the income declared, which will always be at least equivalent to the official
minimum wage. Salaried rural employees contribute on the basis of their monthly
wages, in the same manner that urban employees do, whereas employers’ contributions
are a percentage of the value of commercialized production.
The concept of “specially insured persons” was introduced into legislation in 1991
with the intent of offering special treatment to a portion of rural workers who
are involved in family economy regimes, thus extending social protection to the
family as a whole. The pensions of people insured under this category are strongly
tied to certain months of the year and to the type of agricultural product grown.
Furthermore, the selling price of their products usually suffers oscillations due
to the bargaining power of buyers (generally large food suppliers) and to the presence
of intermediaries that also receive a portion of profits at negotiations. Given
this unstable financial flux, specially insured persons have very low incomes; therefore,
the additional resources necessary for the full functioning of the regime must be
guaranteed by the State.
This social insurance model, which is contributory yet heavily subsidized by the
State, was responsible for the payout of 7.9 million pensions amounting to R$45.5
billion in 2009. In the same year, the contributions collected totalled only R$4.6
billion, which resulted in the State needing to finance R$40.9 billion – 1.3 per
cent of GDP.
The social gains are already evident since they have been enabling elderly agricultural
workers to have a dignified life. Moreover, the monthly pensions paid out by the
social insurance system represent an impetus for increased activity in the service,
goods and other sectors, especially for smaller and poorer towns.
Data from the National Household Sample Survey (Pesquisa Nacional por Amostra de
Domicílio, PNAD) show that social welfare benefits are directly responsible for
the reduction in poverty and indigence4 in rural areas. Using the survey, it is
possible to establish a comparison of the evolution of the poverty and indigence
rates with and without the effect of social transfers in rural areas since 1992
(graph 1). It can be observed that under both circumstances, there is a reduction
in the rates since 2001 and a tendency for the two curves to diverge. In 1992, the
difference between the poor and indigent in rural areas who received transfers and
those who did not was 4.5 and 8.6 percentage points, respectively. In 2001, that
difference rose to 8.9 and 13.5 percentage points, and, by 2008, it had reached
14.6 and 15.1 percentage points, respectively
By 2008, 53.5 per cent of the rural population was still poor but this figure would
have jumped to 68.1 per cent if there had been no social insurance transfers. In
absolute terms, this represents a reduction of 4 million people. Similarly, 26.1
per cent of the rural population was indigent in 2008, but without social transfers,
this percentage would have been 41.3 per cent, indic indicating a reduction of 4.1
million people.
Recognition that Previdência Social Brasileira (Brazilian Social Insurance) (urban
and rural) contributes strongly to the reduction of poverty, especially among the
elderly, is growing. This becomes more apparent in rural areas, given that pensions
are the main sources of income for many rural families. As such, family structures
themselves have undergone significant alterations: pensioners have acquired a better
standard of living and they have gone from fulfilling the role of “dependant” to
that of “provider” within their family.