Brazil has announced its plans to lift the current limits on foreign ownership of agricultural land.
Secretary of Investment, Moreira Franco called the restriction on sales of agricultural land to foreign individuals and companies “nonsense”. He said “The government will discuss the issue and see how it can solve this. It is something completely unreasonable.”
The restrictions were put in place in 2010 by former President Lula da Silva who limited the amount of land foreign investors could buy. This followed his concerns that countries like China would claim control of large segments of Brazil land.
But without foreign lenders able to receive land as collateral if local borrowers defaulted, the restrictions began to limit international credit, especially in the agricultural sector.
This comes as Brazil’s powerful Landless Workers Movement, known as MST, has promised to launch a new wave of land occupations following the interim governments’ replacement of the suspended President Dilma Rousseff. Brazil already has vastly unequal land ownership, with 1 percent of the population owning nearly half of all the land.
A review of the new rules on foreign land ownership have long been defended by companies trading in Brazil commodities, to allow for more investment to flow into the country – in particular, timber, pulp and sugar.