Foreign Investment in Agriculture in MERCOSUR Member Countries

This report analyzes foreign investment in agricultural land and production within the MERCOSUR member countries, focusing on Argentina, Brazil, Paraguay, and Uruguay. It examines three investment models: state-level cooperation agreements, direct private land purchases, and foreign direct investment in production via contract farming. The document highlights a general lack of reliable data on land ownership across the region, though it notes that foreign investors—primarily from within MERCOSUR—play a significant role. It further details the legislative responses of these governments to regulate foreign land acquisition, driven by global concerns over 'land-grabs' and domestic debates on food security and national sovereignty.

• There is a significant lack of reliable data on foreign agricultural land ownership in MERCOSUR countries, though available estimates vary widely by nation. Brazil is the only member with a national land property registration mechanism, estimating foreign ownership at 1.7 per cent of total arable land. In Argentina, a private estimate suggests foreigners own 3.4 per cent of overall arable land, while in Paraguay, 2008 census data indicates foreigners own 19.4 per cent of the national territory, with over half owned by Brazilians. Uruguay lacks a complete estimation because it does not record land acquired by foreign business corporations.
• Foreign investment in agricultural production in the region is heavily driven by contract farming, particularly in Argentina and Brazil. Argentinean firms such as El Tejar, Los Grobo, and MSU are highly active, expanding their operations into Brazil. In the Pampas region of Argentina, approximately 50 per cent of total grain production is estimated to be produced under contract farming arrangements, where business organizers combine land leases, service contracts, and financial resources.
• Argentina has entered into specific state-level cooperation agreements for agricultural land. One agreement was signed between Río Negro provincial authorities and the Chinese government-owned Heilongjiang Beldahuang State Farms Business Group, involving a 20-year lease of 254,000 hectares of farmland. Another agreement was signed in February 2011 between the El Chaco provincial government and the Al-Khorayef Group, linked to the Government of Saudi Arabia, involving a concession for irrigated production in the El Impenetrable region.
• Argentina enacted Law No 26.737 to restrict foreign investment in agricultural land. This law defines a 'foreign stakeholder' as a foreign national or a legal person with more than 51 per cent foreign-owned capital. It establishes a National Rural Land Registration Office and sets quantitative limits: foreigners cannot own more than 15 per cent of total agricultural land in the country, province, or municipality, and no single foreign person or firm can own more than the value of 1,000 hectares in the 'zona nucleo' (best agricultural region).
• Brazil has a long history of restricting foreign land purchases, starting with Law No. 5,709 in 1971. While the country maintains a centralized registry (SNCR) under INCRA, the effectiveness of data has been questioned because buyer nationality was only established after 2006. Proposed amendments to the law seek to limit foreign land acquisition to approximately 50 modules per municipality, with a cap ensuring no municipality has more than 25 per cent of land owned by foreigners.
• Paraguay has the least amount of public and political debate regarding foreign land restrictions despite high levels of foreign ownership. While Law No. 2,532 (2005) bans foreign land purchases in a 50-kilometre strip along the land and river borders for natives of contiguous countries, the report notes this has been ineffective as it does not control business corporations and is often ignored by officials.
• Uruguay does not currently have laws limiting land purchases by foreigners, although the issue is under public debate. The country has a record of transactions since 2000, showing that between 2000 and 2009, 24,183 land sales occurred, involving six million hectares. There is a trend of natural persons selling land to business corporations, which are believed to involve mostly foreign capital, including firms from Sweden (Stora Enso), Chile (Arauco), and Finland (Botnia).
• The report identifies a tension between different local stakeholders in Argentina. Liberal political parties (such as PRO), the Argentinean Forestry Association (AFoA), and large producer associations (SRA and CRA) generally favor liberalizing the land market to boost production and land prices. Conversely, small-farmer associations (like the FAA), left-wing parties, and urban NGOs advocate for restrictions to prevent the expulsion of household farmers and protect national sovereignty.

APA

Piñeiro, M., & Villarreal, F. (2012). Foreign Investment in Agriculture in MERCOSUR Member Countries. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/foreign_investment_mercosur.pdf

Chicago

Piñeiro, Martin, and Federico Villarreal. Foreign Investment in Agriculture in MERCOSUR Member Countries. International Institute for Sustainable Development, 2012. https://www.iisd.org/system/files/publications/foreign_investment_mercosur.pdf.

Wikipedia

{{cite report |last1=Piñeiro |first1=Martin |last2=Villarreal |first2=Federico |title=Foreign Investment in Agriculture in MERCOSUR Member Countries |publisher=International Institute for Sustainable Development |date=July 2012 |url=https://www.iisd.org/system/files/publications/foreign_investment_mercosur.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{pieiro2012foreign, author = {Piñeiro, Martin and Villarreal, Federico}, title = {{Foreign Investment in Agriculture in MERCOSUR Member Countries}}, institution = {International Institute for Sustainable Development}, year = {2012}, month = jul, url = {https://www.iisd.org/system/files/publications/foreign_investment_mercosur.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }