Brazil's foreign land ownership saga
Alastair Stewart
South America Correspondent
Another couple of months on and still the uncertainty continues over the rules that will govern foreign ownership of Brazilian farmland in the future.
Indeed, the debate seems to have regressed and polarized over the last six months with legislators locked over the constitutionality of restrictions.
Meanwhile, the market for large lots of land remains soft because of the withdrawal of foreign-backed corporate farms from this market.
Back in August 2010, Brazil's attorney general issued a new interpretation of a law restricting the purchase of farmland by foreigners to small lots. The hastily drawn-up document was a reaction to news that Chinese state companies and sovereign wealth funds were looking to buy large tracts of Brazil's interior.
The government promised definitive rules would soon follow, which would restrict land deals but facilitate foreign investment in agribusiness. That did not happen with the complexity of the issue frustrating attempts to merely lay down the attorney general's new ruling in a law.
Since late last year, opposition to the restrictions has gained leverage as it became clearer that restrictions could be challenged as unconstitutional.
The net result is that a lower house committee remains stuck between two proposals: the government-backed draft which reinforces the Aug. 2010 ruling, and another proposal, backed by Commission Head Homero Periera that advocates the reinstatement of pre-2010 rules, which basically allows any foreigner to invest as long as they set up a Brazilian company.
And so the saga continues.
