BRASILIA (Reuters) - A congressional panel backed by Brazil’s powerful farm lobby recommended on Tuesday dismantling Indian affairs agency Funai, a move critics said would leave indigenous tribes unprotected from an advancing agricultural frontier.

Indigenous people of southern Brazil take part in a protest against the report of the parliamentary commission of inquiry that investigates fraud and irregularities in the process of demarcation of indigenous lands, made by National Indian Foundation (Funai) and National Institute of Colonization and Agrarian Reform (Incra), in Brasilia, Brazil May 16, 2017. REUTERS/Ueslei Marcelino

Brazil’s National Indian Foundation (Funai) has sought to protect tribes by guaranteeing their land so they can preserve their cultures. That has put it in conflict with farmers who clash with native communities over land rights as production in agricultural powerhouse Brazil moves further into the Amazon rainforest.

The report by a commission in Brazil’s lower house of Congress also called for the prosecution of Funai officials for backing what it considered fraudulent land claims by indigenous groups with questionable native ancestry. It backed the revision of rulings on land borders related to such claims.

Fifty Indian men with body paint and feathered headdresses danced in a circle outside Congress to protest the report’s recommendations and the fact they were not allowed into a commission meeting to comment on its findings.

“The death of the Funai would be a sort of genocide because it has advised us on how to survive,” said Francisco, 42, the bare-chested leader of the Kaingang people of southern Brazil. “These lawmakers represent the interest of agribusiness, not our interests.”

“OVER-PROTECTIVE AND PATERNALISTIC”

The report, which is expected to be approved by the commission later on Tuesday, proposed replacing Funai with a National Indigenous Office under the Ministry of Justice, thus replacing an agency run by anthropologists with one in the hands of politicians.

The parliamentary inquiry’s recommendations on Funai will add momentum to a constitutional amendment before the lower chamber that would remove from the executive branch the final word on land dispute decisions and give it to Congress. The bill would also open up reservations to mining, which Funai has opposed on grounds it would destroy tribal cultures.

Brazil’s 900,000 indigenous people make up less than 1 percent of the population, but they face higher rates of malnutrition, child mortality and unemployment than most other Brazilians, according to government data. They belong to 300 different nations and speak almost as many different languages.

Slideshow ( 8 images )

The Funai agency is in disarray following the firing of its president on May 5 after he criticized a 40 percent budget cut that he said made it impossible for the agency to defend indigenous peoples from clashes with farmers.[nL8N1I74Q5]

A spokeswoman for Funai said the agency had no immediate comment on the report.

The report’s author, congressman Nilson Leitao who leads the large block of lower-house legislators who represent farm districts, said Funai had ignored Indians’ health and education, and the desires of some indigenous people to enjoy the fruits of economic development.

“There are Indians who want to become miners and producers, and they should have the freedom to decide for themselves. Funai has been over-protective and paternalistic,” he told reporters. “The Indians could be living on a big mine while their people die of hunger.”

“THE FUTURE WILL BE FOR SOY”

Critics of the report, mainly from the leftist opposition to President Michel Temer’s center-right government, said the farm lobby offensive against Funai highlighted Brazil’s move toward relaxing environmental licensing and a plan to allow foreign companies to buy farmland again.

“If this report is adopted, there will be no place for the indigenous in the future of Brazil. The future will be for soy, corn and sugar cane,” said Workers Party lawmaker Nilto Tatto. “This is the same vision that wants to destroy the forests of Brazil.”

NGOs working on indigenous rights and environmental conservation in Brazil saw the report as a poorly-orchestrated attempt by the farm lobby to criminalize social movements.

The report criticized international organizations for interfering with internal Brazilian matters.

“It’s part of a larger strategy to remove ‘obstacles’ that limit access by land speculators, ranchers, illegal loggers and mining companies to territories and their natural resources, especially in the Amazon,” said Brent Millikan, Amazon campaign director for NGO International Rivers.