The Brazilian government Tuesday announced its final decision regarding foreign land ownership in the country, capping it at 5,000ha. President Liuz Inacio Lula da Silva said the government had approved limits on land acquisition for investment by foreigners. The President appended the changes, instituting limits to the amount of land an overseas investor can now own in Brazil, coming after months of discussion.

The changes contained in the General Advisory of the Union (CGU) reiterate that foreign individuals, investors or firms will not be permitted ownership of land in Brazil in excess of 25% of the area of a municipality. The regulation as well states that Brazilian rural properties can only be bought by foreigners for agriculture, cattle raising and industrial operations. Other than that, the regulation also requires that all records of acquisitions undertaken by Brazilian companies controlled by foreigners be submitted quarterly to the Justice of the States and the Ministry of Agrarian Development, said the government.

Further to that, the Brazilian government reiterated that the regulations are critical in order to maintain control of land ownership, Luis Inacio Lucena Adams said. Luis Inacio Lucena Adams is the attorney general of the General Advisory of the Union. Analysts had posited that the lack of control in terms of foreign land acquisitions in the country have generated excessive appreciation of land prices and made the agricultural frontier expand to the environmental protection areas.

As such, there had been an increasing illegal acquisition and sale of Brazilian public land, with even border land being acquired, subsequently posing a threat to national security, said the authority. Currently, the Brazilian government does not have accurate statistics concerning the overall amount of land that is under foreigners’ ownership. That is because, according to the government, it did not keep track of overseas land acquisitions in the country since 1994.

At the beginning of 2010, the Brazilian Agrarian Development Ministry reported that as at the year 2008, four million hectares had been registered as under foreign ownership. The restrictions say foreigners or Brazilian subsidiaries of foreign companies cannot own more than 5,000 hectares (12,350 acres). A Tuesday statement from the Solicitor General’s Office says land owned by foreigners can be used only for farming, cattle raising or industrial activities that must be approved by the Agrarian Development Ministry.