Farmland in Argentina. In the last eight years, foreign ownership has declined considerably
In 2011, the government of Cristina Kirchner passed a law to limit the ownership of farmland by foreigners. And, among other things, it established that a foreigner could not have more than 1000 hectares in the middle of the core agricultural zones. The provinces then made equivalences to that area.
At that time the law was imposed on the grounds that there were millions of hectares controlled by foreigners. However, according to a subsequent census carried out through the National Registry of Rural Lands, it emerged that only 15.8 million hectares belonged to foreigners out of a total of 267.6 million hectares, including rural, mining and other activities.
When the law came into force and it was regulated there was 6.09% of foreignization at the country level. By 2017 it had gone to 5.57% and now The information published in the Ministry of Justice and Human Rights as of last August reflects that this foreignization dropped to 5.01%.
Why did the foreign ownership recede?
According to sources who follow what is happening in the farmland market, there were many foreigners who sold their establishments, others like the Tompkins family donated to national parks and even 120,000 hectares of the binational complex between Argentina and Paraguay would have been removed from the database by Yacyretá .
In 2016, The government of Mauricio Macri relaxed a 2012 regulatory decree of the land law but maintained the requirement of the 1,000 hectare limit for a foreign holder. It also did not change 15% of the total domain.
The changes they valued was the acquired right for foreigners. Sale and repurchase were allowed without the limits of 1000 hectares.
In addition, it was specified that for a company to be considered foreign it must have more than 51% of the share package or 51% of the majority will. With 51 percent or less it will not be affected by the law.
Despite the political criticism that Macri’s decree generated at that time, there was no rise in foreign ownership. It even continued to decline as indicated by the data updated to last August.
That Macri decree was now under the sights of Kirchnerism. Strictly speaking, the deputy of the Frente de Todos por Río Negro, Graciela Susana Landriscini, presented a bill last May to repeal Macri’s decree.
“The representatives of the Alianza Cambiemos, imbued with a spirit of openness, privatization and flexibility without equal, and within the framework of the financialization of the national economy, external indebtedness and the consequent flight of capital, altered the content of Law 26,737 and it modified Decree 274, according to the approach of rural land as a market object accessible to global financial flows, investment funds and companies based in tax havens, “said the legislator in the foundations of her project.
“Among the main provisions of Decree 820, it is worth highlighting that of considering as a foreign owner anyone who owns more than 51% of the capital stock of a legal person. This changed the previous regulation that defined as a foreigner who was the owner of a percentage higher than 25% 25%. This single provision widely altered the regulations in force until then, since it considerably broadened the spectrum of possible foreign investors or acquirers, “he added.
The deputy of the Frente de Todos considered that with Macri the cross controls of both the Financial Information Unit and the AFIP are eliminated to prevent possible money laundering or tax avoidance through the acquisition of land; consistent with the measures that made the laws more flexible. conditions of access for foreign capital “.
However, foreignization continued to decline even with Macri. Foreignization is minimal in the main agricultural provinces: 2.89% in Buenos Aires, 1.06% in Córdoba and 1.66% in Santa Fe.
Those percentages in 2017 they were 3.31% in Buenos Aires, 1.07% in Córdoba and 2.09% in Santa Fe.
The highest levels of foreign ownership occurs in provinces with mining activities, such as San Juan, Catamarca, among others, or where foreigners bought large areas in Patagonia or in Corrientes, for example.
Source: La Nacion