Sao Paulo | Reuters –– Brazil’s Rural Society, a group representing large- and medium-scale farmers, filed a case with the country’s Supreme Court on Thursday seeking to overturn restrictions on the amount of land foreigners can purchase.
The attorney general’s office tightened restrictions on foreign land ownership in Brazil in 2010, an action that officials privately said was mostly aimed at restricting China’s access to untapped farmland in the country, the world’s No. 2 soybean producer.
The Rural Society, or Sociedade Rural Brasileiro, said in a statement it had tried to change the rules through dialogue with government authorities for years but ultimately decided on a lawsuit, claiming the restrictions violate Brazil’s constitution.
Gustavo Junqueira, the society’s president, said in the statement that Brazil had forfeited billions of dollars in investments because of the restrictions, which also affect sectors such as mining, real estate and automakers that require rural property.
“The market’s perception is that this impasse increases the legal uncertainty of business, driving away investors who seek solid long-term projects like agriculture,” Junqueira wrote.
Brazil approved the first sales of farmland to foreigners in September 2013, three years after changing the rules. Sales of properties larger than 24,710 acres require approval from Congress.
Although the 2010 regulations made foreign investors more cautious, they have not prevented them from investing. Many have teamed up with Brazilian nationals to buy properties or have been leasing rather than purchasing properties.
— Reporting for Reuters by Caroline Stauffer in Sao Paulo.