Global Policy Forum

Brazil Government Plans to Limit Foreign Land Purchases

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Foreigners have invested $2.34 billion in agricultural land in Brazil and now the government wants to restrict foreign ownership. The Agrarian Development Ministry says that in order to attain food security, farm land and food production must be in the hands of Brazilians. The new legislation will likely be met by strong opposition from foreign governments, hedge funds and operating companies that have been speculating in land in the recent past. 


By Stan Lehman

June 23, 2010

Brazil's government wants to tighten restrictions on foreign ownership of farm lands in Latin America's biggest country, the Agrarian Development Ministry said Tuesday.

Ministry spokeswoman Denise Mantovani confirmed published remarks by Minister Guilherme Cassel, who said that the government does not want foreigners to buy agricultural land in Brazil.

"We do not need foreigners to produce food in Brazil," Cassel told the business newspaper Valor Economico. "This is the policy of President Luiz Inacio Lula da Silva."

"Because of food security, Brazilian lands must remain in Brazilian hands," the minister said.

Mantovani said that 10 million acres (4 million hectares) of land had been registered by foreigners as of 2008 and that between 2002 and 2008, foreigners invested $2.43 billion to purchase land.

According to Valor Economico, the decision to put a lid on foreign ownership of land is due to rising world demand for food, water and natural resources.

Mantovani said that current law says large rural properties can only be purchased by Brazilian citizens or residents.

"But foreigners often bypass that rule by setting up companies in Brazil, which are controlled abroad, to purchase land. This is a foreign company and this is what we want to control."

"I am not a xenophobe but our land is finite. The population grows and demands food," the minister said.

Mantovani said that representatives from several ministries were preparing a constitutional amendment to further restrict foreign ownership of land.

She said the amendment being drawn up "could include the revoking of land titles already purchased by foreigners." She did not provide details.

Most foreigners purchase land to raise cattle and grow soybeans and other crops in the states of Mato Grosso, Mato Grosso do Sul, Sao Paulo, Bahia and Minas Gerais.

We are going to draw up an amendment that will make it clear that foreigners can invest in any field, except land." the minister said.

It is unclear when the amendment will be debated in Congress.


 

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