Brazil’s government favors easing land-ownership restrictions for foreigners to help offset flagging commodities demand, Attorney General Luis Inacio Adams said.
“I’m in favor of more flexibility on land ownership,” Adams said in an interview. “The law needs to be modernized.”
Adams, appointed by President Dilma Rousseff, is the second government official following Agriculture Minister Katia Abreu to urge rewriting legislation that effectively prohibits foreign individuals and companies from purchasing Brazilian land. Rousseff backs the idea, Adams said from Brasilia Tuesday.
The about-turn from Adams, whose 2010 legal opinion on a 1971 property law led to the restrictions, coincides with a drop in commodity prices that has eased demand for farm land and increased the need to attract private investment to kick-start Brazil’s shrinking economy. It’s now up to Congress to approve new legislation, he said.
A bill to increase the amount of rural land foreigners can buy, which has been lingering in Congress since 2012, is being dusted off for reconsideration by legislators, according to the press office of Deputy Marcos Montes, head of the farm faction in the lower house.
Brazil’s economy is forecast to contract 1.2 percent this year as consumer demand and commodity exports eased after sustaining growth in Latin America’s largest economy for more than a decade.
Under current rules resident foreigners can acquire limited amounts of land. Foreign companies and non-residents can only buy land with special authorization.
Such restrictions, which were originally designed to prevent sovereign wealth funds from gaining too much sway over large swaths of Brazilian land, are limiting development of agriculture, which accounts for nearly a quarter of the country’s output.
Brazil is the biggest exporter of sugar and coffee and is looking to overtake the U.S. in soybean shipments. Prices of all three crops have slumped by more than 20 percent in the past year.