28 March 2012

China SignPost™ (洞察中国) #57–“Tilling Foreign Soil: New Farmland Ownership Laws Force Chinese Agriculture Investors to Shift Strategies in Argentina and Brazil”

Gabe Collins and Andrew Erickson, Tilling Foreign Soil: New Farmland Ownership Laws Force Chinese Agriculture Investors to Shift Strategies in Argentina and Brazil,” China SignPost™ (洞察中国), No. 57 (28 March 2012).

China SignPost™ 洞察中国–“Clear, high-impact China analysis.”©

Chinese consumers’ growing appetite for meat is driving increased grain imports, which is great news for corn and soybean growers in Argentina and Brazil. Yet Chinese agriculture and investment companies’ interest in the pampas and cerrado are not universally welcome, and Buenos Aires and Brasilia have both promulgated laws restricting foreign land ownership.

Argentina’s Law on Rural Lands, which passed the upper house of parliament by a vote of 62-1 in December 2011, caps foreign ownership at 15% of the country’s total arable land area. For reference, the UN Food and Agriculture Organization estimates that foreigners currently own approximately 10% of the country’s arable land. The new law also sets a ceiling of 1,000 hectares per individual plot of land owned by a foreign entity and calls on the government to create an inter-ministerial national land registry to keep tabs on who owns what pieces of land.

In 2010, Brazil’s Attorney General responded to concerns driven in part by fears that Chinese investors wanted to purchase major chunks of land in Brazil’s interior by re-interpreting a 1971 land ownership law in a way that would prohibit foreign entities from owning more than 25% of any municipality or possessing more than 100 “modules” of land, which can vary from 100 to 10,000 hectares in size (Reuters). …