STF: social function is a requirement to prevent expropriation of productive lands

Fulfillment of the social function is a requirement so that a productive property cannot be expropriated for the purposes of agrarian reform. This understanding was unanimously established by the Federal Supreme Court (STF), in the judgment of Direct Action of Unconstitutionality (ADI) 3865.

According to article 186 of the Federal Constitution, the social function is fulfilled when the rural property simultaneously meets some requirements, such as the adequate use of available natural resources, preservation of the environment and compliance with labor legislation.

Productivity and social function

The action was filed by the Brazilian Agriculture and Livestock Confederation (CNA) against sections of Law 8.629/1993, which regulates constitutional provisions relating to agrarian reform.

According to the entity, by admitting the expropriation of productive properties that do not fulfill their social function, the standard gives them identical treatment to that given to unproductive properties. For the CNA, the simultaneous requirement of productivity and social function requirements is unconstitutional.

Proper use

In voting to dismiss the request, the rapporteur, Minister Edson Fachin, explained that it is the socially appropriate use that legitimizes the property.

Fachin noted that article 184 of the Federal Constitution authorizes the expropriation for social interest of rural property that is not fulfilling its social function. In turn, article 185 prohibits the expropriation of productive properties and requires the law to establish standards to comply with the requirements relating to social function.

In other words, the Constitution itself requires the fulfillment of the social function as a condition so that productive property cannot be expropriated and delegates to infra-constitutional legislation the definition of the meaning and scope of the concept of productivity, so that this criterion is considered.

Thus, for the rapporteur, the Legislature's option for an interpretation that harmonizes "the constitutional guarantees of productive property with the social functionality required of all properties" is in accordance with the Constitution.

The aforementioned constitutional provisions have the following wording:

Art 184. It is up to the Union to expropriate for social interest, for the purposes of agrarian reform, rural property that is not fulfilling its social function, through prior and fair compensation in agrarian debt securities, with a clause preserving the real value, redeemable within a period of up to twenty years, starting from the second year of its issuance, and whose use will be defined by law.

§ 1 Useful and necessary improvements will be compensated in cash.

§ 2º The decree that declares the property as of social interest, for the purposes of agrarian reform, authorizes the Union to propose the expropriation action.

§ 3 It is up to the complementary law to establish a special contradictory procedure, with a summary procedure, for the judicial process of expropriation.

§ 4 The budget will annually set the total volume of agrarian debt securities, as well as the amount of resources to meet the agrarian reform program in the year.

§ 5 Operations involving the transfer of expropriated properties for the purposes of agrarian reform are exempt from federal, state and municipal taxes.

Art 185. The following are not susceptible to expropriation for the purposes of agrarian reform:

I - small and medium-sized rural properties, as defined by law, as long as their owner does not have another property;

II - productive property.

Single paragraph. The law will guarantee special treatment to productive property and establish standards for compliance with the requirements relating to its social function.

Art 186. The social function is fulfilled when the rural property simultaneously meets, according to criteria and degrees of demand established by law, the following requirements:

I - rational and adequate use;

II - adequate use of available natural resources and preservation of the environment;

III - compliance with the provisions that regulate labor relations;

IV - exploitation that favors the well-being of owners and workers.

In the initial petition, the CNA requested the declaration of unconstitutionality of the expressions "exploited economically and rationally", "simultaneously" and "use of land and" of article 6 of Law 8.629/1993. This declaration would reach the provisions of the first article of the same article. 

The contested provisions read as follows:

Art. 6º A productive property is considered to be one that, when explored economically and rationally, simultaneously reaches levels of land use and efficiency in exploration, according to indices set by the competent federal body.

Art. 9 [...] § 1. Use that reaches the levels of land use and exploitation efficiency specified in §§ 1 to 7 of the art is considered rational and appropriate. 6th of this law.

Decision of the ministers: the "Court, unanimously, judged the direct action of unconstitutionality to be unfounded, in accordance with the Rapporteur's vote".

We still do not have access to the ruling to assess the ministers' reasons.

Some extra information can be found in "Social function of rural property and ADI 3865".

ADI's initial petition can be read at the link below: