The firebrand film-makers out to provoke and engage

Gramado's 41st Film Festival was host to more controversy than Brazil has seen on screen for years. Arifa Akbar reports

Lunar love: Mirando Otto and Gloria Pires in 'Reaching for the Moon'

Not everyone at the screening of Reaching for the Moon (Flores Raras) – an anguished love story that opened Brazil's oldest film festival in the Southern mountain town of Gramado – felt entirely at ease with the romance that unfolded before them.

While many were absorbed in the drama – some were even tearful – a hint of nervous laughter rose from some corners of the darkened auditorium at the moment the lovers, Elizabeth Bishop (played by Lord of the Rings actress Mirando Otto), an American Pulitzer Prize-winning poet, and Lota de Macedo Soares (Glória Pires), a Brazilian entrepreneur, sealed their lesbian passion on screen. If the tittering referred to the shock or awkwardness felt by the conservative contingent in the audience, there was much more to come as the week-long festival progressed during August.

Among the provocative festival line-up was Tattoo (Tatuagem), a gay love story set at a time of Brazilian military dictatorship, while Éden told a story of a pregnant and vulnerable woman who is manipulated by an Evangelical pastor. The West End of the World (A Oeste do Fim do Mundo) dramatised the emotional fall-out of the Falklands War on an Argentine veteran, and the documentary Seven Waves Over Sparkling Green brought late-HIV-positive-writer Caio Fernando Abreu's reflections on life, love and morality to the screen. If it was a deliberate move by festival curators to shake up the audience and cause a stir then it paid off: Tattoo was given the festival's most prestigious award (called the Kikito) for best film, while Eden's star, Leandra Leal, was named best actress.

The Gramado Film Festival has just celebrated its 41st year. Although there are bigger film festivals in Brazil – most notably in Rio de Janeiro – Gramado is the most established. It is ironic, though, that this year's edgy films should be shown in a town as kitsch as Gramado, a place built on winter tourism for Brazilians and marked for its faux-European look. It boasts continental architecture, rows of chocolate shops, winter wonderland Papai Noel – where visitors can have their picture taken with Santa – and even its own red London tour bus. The films nestle awkwardly against this twee tourism.

Rubens Ewald Filho, a curator at the festival, says that while Brazilian audiences aren't easily shocked, neither are they accustomed to seeing hot topics played out on their cinema screens. Brazil has the largest film industry in Latin America but most of its output is light entertainment. While a deliberate attempt was made to showcase Brazil's most daring works, Filho says that raising controversy was not the main objective. "In the recent past, Gramado has put on a selection of very difficult movies, art-house choices and dreary documentaries. They weren't popular at all," says Filho. "We could have gone the opposite way, booking only commercial films. [In the end] the films we showed were the best that were available. No tricks, just plain old good movies. Yes, showing Tattoo had a controversy value, but it was so embraced. Isn't it better to have films of a controversial nature than ones that are just plain boring?"

The last time the festival created controversy was in 2008, with The Dead Girl's Feast (A Festa da Menina Morte) featuring a "boy saint" in a small Amazonian community who had an incestuous relationship with his father. In comparison, this year's line-up – with its preoccupations with sexuality and the church – is not as contentious, suggests Filho. Brazilians are open about homosexuality and gay marriage is legal, though "the religious right tries to interfere – [but] more the evangelical [church] than the Catholics".

Hilton Lacerda, the director of Tattoo, is not convinced. He believes that Brazil has seen a conservative backlash in attitudes around sexuality that makes his film all the more incendiary. "A very conservative morality relies on the idea of guilt and the body," Lacerda says. "Its dangerous indoctrinations may come from the neo-Pentecostal churches, from the most fundamentalist side of the Catholic church, or from the right-wing extremists."

His film revolves around an anarchic cabaret troupe. Chão de Estrelas, the cabaret theatre, is a place where people – gay men, artists and intellectuals – gather to "practice resistance [to the military dictatorship] through mockery" on stage and, at its heart, is a tumultuous romance between the troupe's leader, Clécio, and an 18-year-old army recruit. Though the film takes place in the late 1970s, Lacerda says that it is also about "our present time."

Meanwhile, Bruno Sáfadi, the director and screenwriter of Eden, says discussions around the church in Brazil is rarely nuanced and few films have addressed, with any complexity, why the Evangelical church is growing so exponentially – there are now 40 million members in Brazil, an increase of 5 million within a decade. "The Evangelical church is something that is in the headlines," says Sáfadi. "But when Brazilian cinema looks at the issue, it does so in a simple way. I wanted to make a film which looked at its complexities."

He attended a church in Rio, whose pastor was later arrested on charges of money laundering and rape, before making the film. He was heartened by the positive responses to the film at Gramado, though he acknowledged that more mainstream audiences may be perturbed by it, especially given that so much of the nation's cinema is geared towards providing pure, simple entertainment.

The legacy of such unadulterated commercialism lies in Brazil's film history. During the decades of dictatorship from the mid-1960s to the mid-1980s, films were increasingly cleansed of their political content, until they were reduced to the most anodyne forms of entertainment. The military even funded a brand of "Embrafilme", which met the approval of the censors.

The push towards putting controversial, provocative and political films back on the national agenda has been, for Brazil's young iconoclastic directors and for Gramado's curators, an on-going project since that era of artistic repression.