- Title: ARGENTINA: Senate passes law to limit foreign land investments
- Date: 24th December 2011
- Summary: BUENOS AIRES, ARGENTINA (FILE) (REUTERS) VARIOUS OF EXTERIOR OF ARGENTINE PARLIAMENT
- Embargoed: 8th January 2012 12:00
- Keywords:
- Location: Argentina, Argentina
- Country: Argentina
- Topics: Business,Industry
- Reuters ID: LVA4L2C45UIFHGW433MW132RTG2L
- Story Text: Argentina's Senate passed a bill on Thursday (December 22) limiting farmland sales to foreigners in one of the world's top grains-exporting countries, a measure the government says will help protect a strategic resource.
Although other countries such as Brazil have taken similar steps, critics say the curbs could further deter investment in Argentina, the world's No. 3 soy supplier.
Growing global demand for biofuels and food, especially grains crops such as soybeans, have fueled the debate over the need for tighter controls on land sales to foreigners in Argentina and neighbouring countries such as Brazil and Uruguay.
Foreigners will only be allowed to buy up to 1,000 hectares (2,471 acres) of land in the country's most productive farming belt, or the equivalent elsewhere.
The law would also set a 15 percent limit on the total amount of land that can be owned by foreigners in the country as a whole and in each of its municipalities.
Argentina's Senate, controlled by allies of President Cristina Fernandez, passed the legislation 62 to 1. Fernandez, who was easily reelected earlier this year, had strongly backed
the bill and is expected to sign it in the days ahead.
Senator Maria de la Rosa said the volatility of other sectors had drawn investors to push up the price of land.
"The volatility of international food prices also helps that speculative capital come to acquire rural land in Argentina because they're more profitable assets than others, so that's also the opportunity to discuss and pass this law," she said.
Critics say the curbs could cause uncertainty and deter investment in Argentina, the world's third-biggest soybean exporter and a major producer of corn and wheat.
President Cristina Fernandez has an interventionist approach to managing the country's multibillion-dollar grains trade -- limiting wheat and corn exports and heavily taxing exports of cereals and oilseeds.
Farm groups and several opposition parties, however, have acknowledged the need to regulate farmland sales to foreign investors.
It is not clear exactly how much of the country's productive land is currently owned by foreigners. As part of the reform, foreign landowners would have 180 days to declare holdings.
The census should give a clearer picture of how much they own; but the law will not be retroactive, meaning current holdings will not be affected.
Agriculture Ministry officials in Argentina have assured overseas investors that there will be a clear legal framework, seeking to reassure skeptics who fear it could be used to further control agriculture.
The 1,000-hectare limit applies to the central Pampas farm belt or the equivalent in terms of productivity levels. - Copyright Holder: FILE REUTERS (CAN SELL)
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