Regulations to reactivate the agricultural sector

Decree 358/2018 and Decree 350/2018

Decree 358/2018 "on the handing over in usufruct of idle state land", and its supporting regulations, Decree 350/2018, which come into effect on October 7 were published on August 7.

This new regulation, revoking Decree 300, July 20, 2012, endeavors to boost the agricultural sector by promoting the efficient use of land and greater protection for the beneficiary.

Idle state lands

The Decree authorizes idle state land to be handed over in usufruct cost-free for 20 years –extendable for a further 20– to natural persons, and to legal persons for an indefinite period, so that the land can be exploited on a rational, sustainable basis.

Under the legal definition, idle state land is defined as follows:

  • Land that is not being used for farming, stockbreeding, forestry or fruit production, unless it is being left fallow as part of a crop rotation system.
  • Land that is covered in the spiny marabú weed, brushwood or invasive plants
  • Land that is being used for crops or plantations that are unsuited to the soil, that is significantly depopulated and performing badly
  • Land that is used for stock-breeding that has a low density of animals per hectare

Other changes

Other new features in the regulation are:

  • Fund of Idle land. The following categories of land are included in the Fund:
    • Idle land managed by state-owned firms
    • Idle land in state-run firms with legal personality, basic cooperative production units, agricultural production cooperatives and credit & service co-ops, after a binding resolution revoking the usufruct held by the Delegate or Municipal Agriculture Director has been obtained;
    • Land left unworked for over 6 months, which was granted in usufruct for its workers' self-sufficiency, once a binding resolution revoking the usufruct is obtained
    • Idle land that is acquired in the interests of the State from agricultural produce cooperatives or from smallholders
  • Upper limit of land areas to be handed over in usufruct. The maximum land area that can be handed over to natural persons requesting land for the first time for agricultural and forestry produce has been raised from 13.42 ha to 26.84 ha. Where the applications are for large livestock and crops, the hectare limit rises to 67.10 ha, provided that the conditions allow it, so that it is more practical to apply more advanced techniques and achieve competitive results.
  • Reasons for resolving the usufruct contract. New reasons for terminating these contracts are specified, such as the use of illicit financing, such as that emanating from money laundering, corruption and other criminal acts, or non-compliance with the obligations laid out in the Special Social Security Regime.

Regulatory development

Decree 350, which provides the supporting regulations for Decree 358, develops the matters raised there in more detail: the Fund of Idle Land which can be handed over in usufruct, the requirements that legal and natural persons must satisfy in order to be usufruct beneficiaries: the procedure for legalizing the usufruct, extending the amount of land affected, and prolonging its duration; the main contents of the Usufruct Contract, compliance and termination; improvements made to the land*; control of the handing over of idle land and the commitment and involvement of the beneficiary.

* a) The buildings, installations and other civil work necessary or advisable to look after and protect the crops, animals and plantations appropriately, the conservation and improvement of soils and harvests; b) the woods, temporary and permanent plantations and the agricultural labor of working the land and crops, necessary for production; and c) the homes of the beneficiary and family members, as established in the regulation of this Decree.