PRODUCTION of fruit for export is a rapidly expanding, prominent, and profitable agricultural sector in Latin America. By volume and value, export of fruit from some countries is displacing traditional agricultural commodities such as coffee, cacao, bananas, pineapples, and grains. For example, melons from Mexico are systematically routed to North American markets; grapes, peaches, and plums from Chile find their way to European and North American markets during the northern winter; and pears and apples constitute valuable exports from Argentina. This export activity functions only on a rigorous technological basis: sound water management with scientific dosages of nutrients, intensive land utilization, stringent pest-control standards, suitable infrastructure for rapid transport of the products to seaports, and aggressive marketing strategies. Under these circumstances only modernized systems of fruit production result in the financial capital necessary to sustain the levels of quality and volume that international demand requires. Concurrently, traditional forms of fruit production mostly for domestic consumption increasingly lag economically and sometimes are replaced by the larger export-oriented producers. Although Brazil still trails Mexico, Chile, and Argentina, it has made rapid inroads into this new boom to become a major Latin American fruit exporter. Northeast Brazil is a leading center of the boom, specifically the irrigated portion of the Sao Francisco Valley, where grapes and melons are grown for export (Bicalho and Hoeffle 1990). This article analyzes the conditions under which land there is irrigated and its production incorporated into the export system at high levels of efficiency and modernization. The project is located along the lower Acu Valley in Rio Grande do Norte State in the northern portion of the arid Northeast. Distinct contrasts have emerged between the middle and lower reaches of the Acu River. In the portion that lies upstream from the dam, poverty and deprivation have worsened the conditions under which backcountry (sertao) dwellers have been living. Below the dam conditions are diametrically different: irrigation has brought about modernization of agricultural practices and specialization in the contemporary global agrarian economy. The duality of two so different environments in such close proximity exacerbates the social distances that modern agriculture creates whenever it is superimposed on traditional agrarian communities. Though generally welcomed by regional authorities, this development project has elicited bitter response from some social activists who decry the allotment of land irrigated by governmental projects to commercial enterprises. The activists contend that the project betrays the original purposes of waterworks that were supposedly designed as catalysts to alleviate the hardships of subsistence agriculturalists during recurring drought. This raging controversy centers on the following question: should the goals for development in Northeast Brazil focus on agricultural modernization that renders a more vertically integrated and thus a more internationally competitive economy, or should emphasis be on use of water from public works by small farmers to increase their basic food productivity and to rescue them from chronic deprivation and underdevelopment? Defenders and detractors of these positions frequently collide in public forums (Grossmann 1987). The ensuing discussions coincide with similar debates concerning who profits most from the fruit-export boom in Mexico, Chile, or Argentina: the rural populace or the large entrepreneurs. This article contributes to the ongoing examination of capital-peasantry relationships in Latin America. The study centers on the lower Acu Valley, a region that has been rapidly inserted into the world economy through the export of agricultural commodities that require careful management. Moreover, the water and soil resources of the region require scientific approaches and proper agricultural management. …