Mexico plans land reform to boost investment – sources – by Gabriel Stargardter and Dave Graham (Reuters U.S. – May 14, 2015)

MEXICO CITY – May 14 Mexico’s government is drawing up a land reform to strengthen the rights of private companies dealing with rural landholders in a bid to lure investment and lift the economy, according to two people familiar with the plan.

The legislation being drafted will draw on an energy reform completed last year that gave the government more power to act in favor of investors in disputes with communal landholders over usage of rural areas such as those known as ejidos, said the two officials from the government and the ruling Institutional Revolutionary Party (PRI).

Part of a wider agricultural reform, the sensitive issue of how to create a firmer legal footing for developers without inflaming protests from poor landholders is with the ministry of agrarian, territorial and urban development (SEDATU), the sources said on condition of anonymity.

With almost half of Mexico’s population living in poverty, a large part of them in rural areas, the rights of communal landholders, or ejidatarios, have long been protected in Mexico.

President Enrique Pena Nieto risks major opposition to the reform plan, especially from left-wing groups.

Proponents of reform say Mexico is missing out on jobs and investment by failing to give enough cover for investors who worry that, under the current law, they can be forced at any time to renegotiate business deals with ejidos.

Offering “legal certainty” to the economic players is fundamental to improving rural development, said Francisco Garcia Cabeza de Vaca, a lawmaker in the center-right National Action Party (PAN) who heads the Senate’s land reform committee.

“We need to give certainty both to the ejido 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,” Cabeza de Vaca said.

An agriculture ministry spokesman said the department was working with SEDATU on a reform to make the ejidos more productive and that public land rights would be safeguarded. A SEDATU spokesman did not respond to requests for comment.

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