May 15, 2015
At one point, Mexico’s president, Engique Pena Nieto, hoped to spark economic growth through energy reform, but a slump in oil prices has shifted the government’s attention to gaining faster growth through other sectors including agriculture.
Mexico’s government is proposing land reform legislation that would strengthen the rights of private companies when dealing with rural landholders, as a road to attracting investment.
Supporters of the legislation state that it is important to give investors certainty that they will not have to renegotiate business deals with rural land holders, or ejidos, and that granting this certainty will drive rural development.
“We need to give certainty both to the ejidos but also the chance, in a given moment, for the private sector to be able to work hand in hand with the agrarian collectives. This is the big issue,” says Francisco Garcia Cabeza de Vaca, head of the Senate’s land reform committee.
Part of a wider agricultural reform, the Ministry of Agrarian, Territorial and Urban Development (SEDATU) will have to walk a fine line when dealing with such a sensitive issue. Approximately half of Mexico’s population lives in poverty, with many in rural areas, which has created a long history of protecting the rights of communal landholders, or ejidatarios, in the country.
Following the Mexican revolution, under a massive land redistribution program in the first half of the 20th century, the ejidos have been granted surface rights to large swathes of the country amounting to over half of Mexico’s 196 million hectares, and if this land reform is passed, it could be the most dramatic overhaul since the 1992 reforms enacted by president Carlos Salinas.
The legislation outlines how investors must negotiate with landholders for usage, requiring both sides to declare valuations on the land. If no agreement can be reached, the government will arbitrate, and if it is determined that the use of the land is in the best economic interest of the country, can expropriate land in favor of the investor and determine the compensation that is due to the ejido.
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