Last week Parliament approved a change in Uruguayan legislation regarding the purchase of farmland. This legislation is applicable equally to international and domestic investors in farmland in Uruguay. The change is related to the Institute of Colonization. Previously all transactions related to properties over 500 hectares and a CONEAT index over 100 had to be presented to this Institute. The Institute has the right to take over the transaction on the conditions as established by the private parties. That leaves the buyer outside the deal as envisaged, but without further disadvantage. In practice this right is not often exercised, mainly in the case of existing colonies on adjacent land or areas to favor smallholdings or local dairy farmers on small plots.
The change in legislation is that after this legislation is ratified and duly published transactions in Colonia, Florida, Maldonado and San José of properties over 200 hectares and 100 CONEAT need to be presented and in Canelones even properties over 100 hectares and CONEAT over 100.
In practice not a significant change for investors, but mainly a three week delay in the purchase process. Obviously we can assess investors about the chances of such take-over happening.