BRASILIA, Oct 23 (Reuters) - Brazil's Supreme Court ruled on Wednesday that the terms for the creation of one of the country's largest Indian reservations did not apply elsewhere, in a setback for agricultural interests hoping to limit the expansion of reserves onto lucrative farmland.
In its decision, the court ratified the existence of the Serra do Sol reservation on the northern border with Venezuela and Guyana.
But it ruled unanimously that 19 conditions it set in 2009 for the formation of the 6,730-square-mile (17,430-square-km) reserve did not apply automatically in other disputes over Indian lands, although they could serve as precedents in future cases.
Brazil's powerful farm lobby had hoped the extension to other areas of one of those conditions - banning an expansion of the land set aside - would restrict the government's ability to enlarge reservations onto land already occupied by farmers.
Hundreds of conflicts have erupted in rural Brazil as the government tries to follow a constitutional mandate and create Indian reserves on land often already claimed by farmers or cattle ranchers. The conflicts have become worse as Brazil's agricultural frontier moves north toward the Amazon basin.
Indian rights activists welcomed the ruling.
"It consolidated the Serra do Sol reservation and reduced chances of these conditions being used in a negative way in other cases," said Marcio Santilli, head of a non-profit conservationist group dedicated to the defense of indigenous cultures and habitats.
Some 20,000 Indians, mostly of the Macuxi tribe, live on the reservation in the state of Roraima. Rice farmers resisted leaving the areas when the reservation was created by decree in 2005, and the case went to the Supreme Court.
In 2009, the court ruled that the reservation should be inhabited only by indigenous people, and non-indigenous inhabitants were forced out. But among other conditions, the court established that the reservations could not be enlarged.
In Wednesday's ruling, the court clarified that the reservation could be expanded but that the state could not expropriate additional land by decree and must compensate its owners.
The court also established that the Indians of Serra do Sol could extract minerals for cultural ornaments and jewelry without government authorization, but would need a permit if they engaged in commercial mining. (Reporting by Anthony Boadle; Editing by Peter Cooney)