Brazil hardens its legislation against farmland “speculators”

Once again, Brazil has altered its legislation in an attempt to curb the intervention of foreign “speculators” wishing to acquire farmland on its territory.

The Brazilian Attorney General Inacio Adams thus issued a new ruling that reinforces the law already adopted during the summer of 2010. The ruling is aimed at preventing non-Brazilians from buying controlling shares in companies that own farmland in Brazil. It also implements additional means to prohibit “speculators” to circumvent the current law that only forbids them to acquire farmland.

“We need to distinguish between on one hand speculators and sovereign funds, which are a threat to our food security, and on the other foreign investors, who come in with valid projects,” said Minister of Agriculture Wagner Rossi to The Financial Times. Non-Brazilians currently own close to 1.8 million hectares (4.5 million acres) of Brazilian farmland––a figure that has grown 11.5 percent since 2008 indicates the Government.

It seems that Brazil is currently engaging in doublespeak. We are seeing, on one hand, the country’s declared willingness to liberalize international agricultural trade to increase export volumes, and on the other, its recent realization of the need to protect its domestic market from a massive and unfettered influx of short-term investors. Would not the best solution between these two positions be for Brazil to decide on a joint approach––regulated free trade?