Food inflation, land grabs spur Latin America to restrict foreign ownership
Newly concerned over land grabs and eager to exercise more control over its food security, Argentinean President Cristina Fernández de Kirchner said April 27 she would send a bill to Congress restricting how much land foreigners can buy or own. Uruguay fears that nations such as China and Saudi Arabia want to buy prime real estate and has promised to clamp down. Brazil, the world's biggest producer or exporter of beef, coffee, sugar cane, orange juice, and tobacco, last year blocked foreign companies based in Brazil from purchasing additional local real estate.
"What is happening more and more frequently is that countries ... are interested in buying in the parts of the world where the food, water, and energy are," says Jorge Saravia, an Uruguayan senator charged with helping pass new legislation.
Volatile food prices
To be sure, South America has benefited greatly from the commodities boom. Its grains, oils, and minerals are helping fuel China's rapid growth. Just five commodities accounted for 43 percent of Brazil's exports last year. Argentina's commodities exports doubled between 2005 and 2008. Yet the fear that rich countries that don't have their own supplies of food or raw materials will buy up land in poorer, more productive nations is growing, with the World Bank last year citing South American and African countries among those most vulnerable.
The report said volatility in food markets that caused food riots in some places in 2007 and 2008 was a wake-up call to import-dependent nations. Some of them targeted arable land abroad in a bid to protect themselves from uncertainty and guarantee their future food supply.