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Until last month, there was no reliable information about the proportion of land owned by foreigners Argentina. Estimates varied between 14.5m and 27m hectares.
Last year, the National Register of Rural Lands took on the massive task of surveying the cadastral registers of the 23 Argentine provinces in order to determine the amount of land owned by foreign citizens and companies in every district in the country.
The results were presented by President Cristina Fernández de Kirchner on a national address on 23rd July, and were at the lower end of expectations. The president announced that 15.88m hectares are currently owned by foreigners, or 5.93% of all rural lands – an area equivalent to the whole of Tunisia or Suriname.
Rural lands make up 95.88% of the total area of Argentina, and include not only agricultural lands, but also mining and tourism areas.
The issue of land ownership, especially in resource-rich countries, is key in a world were food, water, and minerals are at a premium. While having an accurate panorama of the situation is a first step towards addressing possible imbalances, a closer look is necessary to analyse who actually owns the land, and what it is being using for.
In 2011, President Fernández sent a bill to Congress which sought to limit the amount of land foreigners can purchase, both in absolute and relative terms. In the words of then-Agriculture Minister Julián Domínguez, the aim was to “defend the right for land to remain in the hands of Argentines.”
The first limit imposed by law 26,737, passed by Congress on 22nd December 2011, is that each foreign individual or company cannot own more than 1,000 hectares of land – regardless of whether it is used for commercial exploitation or for private enjoyment.
Also, lands owned by foreigners cannot exceed 15% of the total area of the country, of each province, or of each sub-provincial district (the original bill set the limit on 20%, but it was modified by Congress). Furthermore, one nationality cannot own more than 4.5% of the total.
Law 26,737 is not reatroactive, which means that people who had purchased land before the law was passed did not risk being dispossesed, even if they surpassed the allowed limits.
One of the main implementation problems that the law faced, however, was the lack of reliable information regarding actual land ownership by foreigners. The estimates varied so wildly, it was not even known whether the 15% limit had been excedeed or not. In order to collect that information, held by provincial administrations, the law created the National Register of Rural Lands (RNTR), which started working on 1st June 2012.
The RNTR collected information from affidavits submitted by foreign nationals who own property in the country, provincial land registries, and national bodies such as the Immigration Department, the Borders Directorate, the Geographic Institute, the Mining Secretariat, and others.
As well as carrying out this national survey, the RNTR set up a system to process online requests by foreigners who wish to purchase property in the country, who will now require a permit issued by the RNTR.
The results of the survey show a huge disparity in terms of foreign land ownership between the different provinces.
Considering the soy boom that swept across the region over the last decade or so, it is perhaps suprising to find that the fertile lands of the pampas have some of the lowest rates of foreign ownership. Buenos Aires, La Pampa, Santa Fe, Entre Ríos, and Córdoba have between 1% and 4.9% of foreign ownership (Buenos Aires’ foreign land ownership is high in absolute terms, at just over 10m hectares, but this only represents 3.5% of the total area of the province). Academic studies, like that of FLACSO economist Eduardo Basualdo, show that the country’s prime agricultural land is in many cases still owned by the same families that acquired them in the 19th century.
Likewise, the survey showed that Patagonia, an area famously coveted by foreign investors due to its natural beauty, also had low-to-moderate rates of foreign land ownership. Chubut, where the Benetton brothers own hundreds of thousands of hectares, has a rate of 4.1%, while Tierra del Fuego has 7.7%, Río Negro 2%, and Neuquén 6.4%. Santa Cruz is the exception: with 9.6% of its rural land owned by foreigners, it is the sixth province in the ranking.
The case of Santa Cruz, where large-scale mining projects such as the Cerro Vanguardia gold mine and the Río Turbio coal mine (exploited by a state-owned company) are found, is however consistent with another finding of the survey. The mineral-rich Andean provinces are some of the ones with the highest rates of foreign land ownership. In fact, Catamarca (12.1%) and La Rioja (10.9%) are very near the top of the ranking, followed quite closely by Mendoza (8.6%) – which also has lands with high value for tourism, cattle rearing, and wine production – and San Juan (7.1%).
Salta is also near the top with the same percentage as La Rioja (10.9%). In this area, the RNTR report indicates that lands are mainly used to produce tobacco, grains, and oilseeds.
However, the two provinces with the highest rates of foreign land ownerships do not produce either gold or soy, but paper. The north-eastern provinces of Misiones (13.9%) and Corrientes (13.7%) have almost reached their limit, and will not be able to sell much more of their land to foreigners.
While no province surpassed the 15% limit, as many as 49 (out of 569) sub-provincial districts did. In some cases, in provinces like Santa Cruz, Chubut, La Rioja, Corrientes, and Misiones, the land owned by foreigners in these districts exceeds 30% of the total.
Who Are They?
The most intriguing aspect regarding foreign land ownership in Argentina is: who are the landowners, and what do they use the land for? Unfortunately, when contacted by The Argentina Independent, the RNTR was unable to provide such information. Public information regarding ownership is still scarce and hard to come by, especially when it comes to the north-western provinces.
According to the RNTR survey, 23% of the foreigners who own rural land in Argentina are individuals, while 77% are companies, and around 50% of the land owned by foreigners is in the hands of US nationals (3m hectares), Italians (2.3m hectares), and Spanish (2.1m hectares). The Swiss, Uruguayans, and Chileans follow with fewer than 1m hectares each, whilst Canadians, French, Dutch, and British nationals trail behind with fewer than 0.5m hectares per nationality.
RNTR Director Florencia Gómez mentioned that “there is a myth about the south having higher levers of foreign land ownership, while actually foreign land ownership is spread throughout the country.”
This “myth” has it roots on a widely known fact: the Italian Benetton brothers, through their Compañía de Tierras Sud Argentino, are the single largest foreign landowners in the country, with over 900,000 hectares to their name. That is 900 times the new allowed maximum per foreign person or company. Other high-profile foreigners that own land in Patagonia -and may have helped spread the view that this region is being “taken over” by foreign investors- include CNN founder Ted Turner, Hard Rock Cafe owner Joseph Lewis, and businessman-turned-environmentalist Douglas Tompkins.
Tompkins, founder of clothing brands The North Face and Esprit, started a foundation in the 1990s with the aim of buying up large pieces of land in order to protect them from development, mainly in Chile and Argentina. In the latter, he is thought to own up to 350,000 hectares.
As well as owning land in Patagonia, one of Tompkins’ large-scale conservation projects has been the ‘Iberá Project’, which consists of buying up land in the Iberá Wetlands, in Corrientes, to create a national park. His Conservation Land Trust has purchased over 160,000 hectares in this area, “with the goal of including these lands within the area of strict conservation, creating 700,000 hectares of what we propose to call the Great Iberá Park,” explains the website.
Despite being largely over the new ownership limit, Tompkins supported the limits set out by the new law. In a radio interview in 2011, the millionaire expressed his view that the law “is a step, maybe, towards a policy that can stop the over-exploitation of agricultural lands and the damage to the vegetal layers of the soil,” and added that “not only foreigners, but also large companies are degrading Argentine soils, which are the country’s most important asset.” He also said that he is ready to donate 200,000 hectares he owns in Corrientes to the state.
Land conservation projects in foreign hands are not the only reason Corrientes ranked second in the RNTR survey. The north-east region is the main producer of wood pulp in the country, an activity were foreign capital features prominently.
Misiones, the province with the highest percentage of foreign land ownership, is the centre of forestry activities and wood pulp production. Here, land ownership is not only largely foreign, it is also highly concentrated.
Alto Paraná, the biggest wood pulp producer in the country, was an Argentine company until the mid-’90s, when it was sold to Chilean group Arauco. Now, Arauco Alto Paraná is the largest landowner in Misiones, with 232,000 declared hectares. However, indigenous organisations claim that the company in fact owns as much as 280,000 hectares through various means – that is 10% of the total area of the province, and accounts for the majority of the 400,000 hectares that are currently in foreign hands.
Throughout the years, Alto Paraná’s aggressive expansion caused numerous problems with the locals who were displaced and relocated to make room for the company’s exotic pine plantations, which have also affected the native forest and traditional crops such as yerba mate.
In the Andean region, prominent landowners include British-Malaysian group Walbrook, whose company Nieves de Mendoza purchased 250,000 hectares in Malargüe, Mendoza, in 2001, and later acquired the Las Leñas skiing complex, which spans 228,000 hectares. The province also has a large amount of smaller foreign landowners who have purchased parcels -mostly of fewer than 400 hectares- in productive areas such as the Uco Valley, for tourism and agricultural purposes.
A Regional Problem
The problem of foreign land ownership is not exclusive to Argentina. From Benin to Brazil, many countries are discussing ways to limit the amount of land in foreign hands. In South America, it is a hot issue.
In Brazil, it has been for decades. The South American giant legislated on the matter as early as 1971, though the law that sought to limit the purchase of land by foreigners was never applied. As a result, the National Institute of Colonisation and Agrarian Reform (INCRA) calculates that 4.5m hectares of land in the country are owned by foreigners, while the government admitted that is a conservative estimate, and could in fact be twice as much. According to INCRA, between 2007 and 2008 foreign groups bought land at a rate of 12km2 per day.
In August 2010, the Brazilian attorney general, on instructions from former president Lula Da Silva, reinterpreted this old law, setting the maximum amount of land foreigners can purchase on 5,000 hectares. Also, foreign land ownership is restricted to no more than 25% of municipal territories, while no more than 10% of municipal territory can be owned by companies or individuals of the same nationality. This reinterpretation is still being debated in Congress.
Whilst Brazilians debate the issue of foreigners within their borders, many of them have, throughout the years, emigrated and purchased land in neighbouring Paraguay. The brasiguayos -as Brazilian farmers and their descendants are called- have played a key role in the development of the soy boom in the country. But due to the lack of restrictions, foreigners (from Brazil and elsewhere) control between nine and ten million hectares -or between 25% and 30%- of all arable land in the country. While in 1940 it was declared illegal for foreigners to own land, this legislation was overturned by the Stroessner dictatorship. In December 2011, former president Fernando Lugo stated his intention to follow on the footsteps of neighbours Brazil and Argentina and establish limits on foreign land ownership -six months later he was ousted.
In Uruguay, the government is drafting a bill which will ban the sale of agricultural or forestry land to foreign states, or to companies that have foreign states as shareholders, while promoting the purchasing of land by small Uruguayan landowners. According to official information, only 53% of the country’s working farms are owned by Uruguayans, whilst 43% of them are owned by companies whose ownership the government has been unable to determine.
Other countries in the region, like Colombia, Ecuador, and Peru, are also analysing the possibility of establishing limits to foreign land ownership.
Searching for a Solution
There is no doubt that the issue of land ownership is a huge challenge faced by many countries, especially in the developing world. Governments that have targeted foreign land ownership go out of their way to clarifiy they are not being xenophobic, but merely defending national sovereignty.
The effectiveness of legislation seeking to limit foreign land ownership, however, has been put into question repeteadly. International farmers’ organisation Grain, for example, has published a comparative study where they conclude that there are a number of challenges to this kind of legislation.
Firstly, they say, laws tend to focus on land ownership, but not on land rental or other types of indirect investments. For local communities, however, it does not make a difference whether a foreign enterprise purchases or rents a piece of land if they still have control over it. These laws, also, can be quite easy to evade by foreigners who “hide behind nationals”, who act as legal owners while the foreign individual or company has effective control of the land. Finally, they point out, the foreign ownership debate can turn into a nationalistic discourse that hijacks the more important debate, which is: “what kind of strategy on agriculture, on food security or on rural means of subsistence is being promoted and supported.”
Indeed, when the debate focuses solely on foreigners, it leaves aside other equally important issues, such as land concentration in the hands of nationals and its use. The land survey carried out by RNTR in Argentina showed that the country’s most productive agricultural land is overwhelmingly owned by Argentines. However, this land is heavily concentrated by a handful of family companies who have exercised a disproportionate amount of power throughout the country’s history. The development of the agricultural model has been largely left in the hands of the market, and crops like soy are taking over other crops, forests, and anything else that stands between producers and the massive profits to be made in soy exports. Meanwhile, land conflicts involving peasant farmers, indigenous communities, and environmental organisations are on the rise.
For many, the question this law leaves is: when are these issues going to be legislated upon?