May 27, 2010
One Million Hectares of Brazilian Farmland Owned by Foreigners
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
In recent years, foreign investors have been busily purchasing Brazilian farmland in order to produce crops, primarily soybeans and sugarcane. The investors have been from China, Argentina, North America, and Europe and they have included farmers, hedge funds, speculators, and governments. Estimates are that when all the purchases are combined, it would add up to more than a million hectares of Brazilian farmland in the hands of foreigners.
Such a large amount of land under foreign ownership has many Brazilians concerned about losing control of some of the best farmland in the country. What is especially troubling is land owned by foreign governments, namely China. The concern is that the raw commodities produced on these lands will be shipped overseas for further value added processing thus depriving the local economy of the potential for jobs and increased economic activity.
There is already legislation pending in the Brazilian Congress that would limit the amount of land a foreigner could purchase in Amazon Lowland Region which is still primarily rain forest. The Brazilian government has been trying very hard in recent years to limit the amount of logging and deforestation in the Amazon Region. As a result, most of the land that has been purchased by foreigners has been in cerrado regions of central Brazil and now there is also talk about placing limits on how much land foreigners can purchase in these regions as well.