It`s late afternoon, and Amaro Joao da Silva, a sugar cane cutter, has eaten nothing all day. He ate nothing yesterday either, except for some pieces of raw cane and tea made from orange peels.

Da Silva, 48, has been a victim of severe malnutrition since birth. He is 4 feet 4 inches tall, has trouble completing sentences and can`t remember the simplest details about his life-such as his birthplace and how many children he has.

''I wake up hungry and go to sleep hungry,'' said da Silva, sitting in his mud-brick house with his wife and 13 children. ''My whole body trembles when I work.''

Centuries of protein-deficient diets and chronic illness have resulted in more than 30 percent of the population in northern Brazil being mentally and physically stunted, according to medical experts and government officials. Even in more prosperous southern Brazil, about 10 percent of the population is of subnormal height, researchers say.

In the most severe cases, known here as Brazilian Pygmies or homens nanicos, researchers say brain capacity is 40 percent to 60 percent below normal and the height of adult males is a foot or more under the 5-foot-9-inch average for men worldwide.

The presence of the homens nanicos, which only became widely known in 1991, has caused shock and embarrassment in a nation that has spent tens of billions of dollars in the last 30 years trying to ease poverty. However, massive industrial projects have failed to raise living standards.

''We thought that if you industrialized the region, the living conditions of the poor would improve. We now know this model is wrong,'' said Danilo Cordeiro, vice minister of health in Pernambuco, the northeastern state where da Silva lives. ''Salaries are low. Farm workers don`t have land. And the poor can`t fight against malnutrition.''

Though poverty and hunger are endemic in Brazil-70 percent of the country`s families live on $120 or less a month-the problems are most severe in Pernambuco, a drought-ridden region dominated since the 16th Century by a handful of families who received huge land grants from the king of Portugal to grow sugar cane.

The cane fields were worked by slaves until emancipation in 1889 and since then by laborers who work 10 hours a day in brutish conditions for about $35 a month. Most cane cutters live in makeshift huts without water or electricity. Health care is nonexistent, and most workers are illiterate.

Da Silva, for example, bought his first pair of shoes two months ago. He and his family often go three days without eating. He walks three hours each day to get to and from work.

Traditionally, Da Silva and other cane cutters have survived by growing manioc, beans and rice on an acre or two of plantation land. But in the last two decades, about 70 percent of the workers were forced off the land by plantation owners who received government subsidies to grow sugar cane for cane-alcohol Brazil automobile fuel. The program, which doubled sugar cane production in the state, is designed to reduce Brazil`s oil imports.

At the same time, Brazil`s federal government has spent more than $10 billion since 1960 encouraging manufacturers to set up textile, steel, petrochemical and other industries in Pernambuco and throughout the northeast. The region`s share of Brazil`s industrial production has increased to 12 percent from 9.4 percent, but wages in Pernambuco and throughout Brazil average less than $50 a month primarily because of a chronic labor surplus.

Efforts to redistribute land-two dozen families own about 40 percent of the state`s best farmland-have been blocked by rich landowners who dominate the political system, according to economists and government officials.

And large-scale development projects, often bankrolled by the World Bank and other international financial institutions, have failed to ease poverty primarily because they didn`t focus on improving basic health care, housing and education, economists said.

Unemployment and underemployment in Pernambuco-which has 10 million people-is 25 to 30 percent, according to government figures. Annual per capita income is about $950.

''There is a direct relationship between low income, malnutrition and nanicos . . . and it starts even before the baby is born,'' said Meraldo Zizman, a professor of child health at Pernambuco State University who has written a book about the nanicos. ''If you are malnourished in the uterus, you will be short forever. We need to start by taking care of pregnant mothers.'' Zizman said newborn babies in Pernambuco weigh about one-third less than newborns in the U.S., with many full-term babies weighing 5.5 pounds or less. He and other experts say that about 40 percent of children under the age of 5 in Pernambuco are malnourished, with half of all cases occurring in infants less than 1-the age when mental and physical development are most affected by malnourishment.

The average farm worker in Pernambuco takes in about 1,500 calories daily, far fewer than the 3,500 calories they need, according to Emilia Pessoa, a Pernambuco pediatrician and expert on malnutrition. Children in the region consume about 600 calories daily, about half of what they need, she said.

To ease malnutrition, Pernambuco`s government is providing about 1 million high-protein meals daily to schoolchildren, although the program fails to reach an estimated 30 percent of the poorest children-most of whom live in isolated rural areas and don`t attend school.

The government also has sent 4,000 workers to rural areas to teach hygiene and to provide neonatal and other basic health care.

But Cordeiro said these programs will have only a limited effect on malnutrition unless there is a radical change in the region`s economy-something he says is unlikely.

And Zizman says that even if malnutrition is eased significantly, it could take a generation or two for the descendants of nanicos to reach their mental and physical potential.

''The problem is nutritional, not genetic,'' he said. ''But it was caused over generations, and it won`t be solved overnight.''