DRIVEN to despair by their life on a reservation, a group of Indians return to their ancestral lands. They find them occupied by white settlers so they squat on them, leading to a stand-off pregnant with violence, writes TOM HENNIGAN

It is a scene all too common in modern-day Mato Grosso do Sul, a rich Brazilian farming state which is the setting for a quietly devastating new film about one of the many conflicts over land between white settlers and the original indigenous peoples of the “New World” that still rage across the Americas.

The new Brazilian feature Birdwatcherssets out to tell the story of the row between ranchers and the original Guaraní-Kaiowá people of Mato Grosso do Sul by focusing on the fallout of one such " retomada" – retaking – of traditional tribal land.

With all the Indian roles played by first-time actors drawn from the Guaraní communities whose stories the film seeks to portray, Birdwatchersoften has the feel of a documentary. But its great success is its ability to make a compelling drama out of Mato Grosso do Sul's land dispute without having to hype it up or dumb it down.

The backdrop to the film is the transformation of the state from forest (" mato grosso" means thick forest in Portuguese) into rolling plains by ranchers, almost all descended from European settlers, who now raise cattle or plant soy and sugar cane.

Among the Guaraní are many elders who remember the arrival of the white man and the Indians’ subsequent corralling on reservations. In recent years they have attempted to retake their old lands, often squatting on them while they wait for Brazil’s lethargic legal system to rule on their right of return.

In one of the movie’s most powerful scenes, the rancher whose land the Guaraní band claims as its own defends his right to it saying it was his grandfather’s before him. In response one of the Guaraní elders silently picks up a handful of red earth and eats it.

Brazil’s farming lobby likes to argue that plenty of the world’s fifth biggest country has been set aside as reservations for Indians, who make up less than one per cent of its 190 million inhabitants. In parts of the Amazon this may be true, but it is most definitely not the case for over 30,000 Guaraní in Mato Grosso do Sul. Though they constitute one of Brazil’s biggest indigenous peoples, they have one of the smallest areas set aside for them. Such is the overcrowding on their reservations that they will never be able to sustain their traditional livelihood of subsistence farming and hunting.

Instead, the Guaraní are reduced to living on handouts from the state and working for a pittance as day labourers on local ranches, often in the brutal, life-shortening work of cutting sugar-cane by hand.

Assigned the lowest rung on the ladder of Brazilian society, the Guaraní are victims of malnutrition, alcoholism and domestic violence. In Brazil they are perhaps best known for their high rates of suicide.

Birdwatchersis by the Chilean-Italian film-maker Marco Bechis, whose 1999 feature Garage Olimpois one of the best portrayals on screen of the brutal campaigns of torture and murder waged by military regimes in South America against left-wing opponents.

Bechis himself was forced to flee Argentina in 1977 at the height of that country’s Dirty War, but has returned from his current home in Italy to make four politically-charged dramas that tackle the region’s twin curses of violence and inequality. But despite his politically-inspired film-making, he never resorts to sloganeering, preferring to mine his subject matter for depth and complexity.

In Birdwatchersmuch of the film's tension is found within the Guaraní band, caught between their traditional way of life and the promise of easy living in the white man's world. Meanwhile, as the adults fight over land, their children come into contact, each fascinated with the other side of the racial divide.

How relevant the film is to the situation in Mato Grosso do Sul today can be gleaned from the news that just this month a group of 130 Guaraní were evicted from a retomadaof their former land from which they were evicted by ranchers in the 1960s. They are currently living on the side of the road.

• Birdwatchersis released today.