Agricultural Policy and National Financial System

Article 184. The Union can expropriate, on account of social interest, for purposes of agrarian reform, the rural property which is not performing its social function, against prior and fair compensation in agrarian debt bonds with a clause providing for maintenance of the real value, redeemable within a period of up to twenty years computed as from the second year of issue, and the use of which shall be defined in the law.

Paragraph 1. Useful and necessary improvements shall be compensated in cash.

Paragraph 2. The decree declaring the property as being of social interest for agrarian reform purposes empowers the Union to start expropriation action.

Paragraph 3. It is incumbent upon a supplementary law to establish special summary adversary proceeding for expropriation action.

Paragraph 4. The budget shall determine each year the total volume of agrarian debt bonds, as well as the total amount of funds to meet the agrarian reform programme in the fiscal year.

Paragraph 5. The transactions of transfer of property expropriated for agrarian reform purposes are exempt from federal, state and municipal taxes.

Article 185. Expropriation of the following for agrarian reform purposes is not permitted:

1. small and medium-size rural property, as defined by law, provided its owner does not own other property;
2. productive property. The law shall guarantee special treatment for the productive property and shall establish rules for the fulfillment of the requirements regarding its social function. Article 186. The social function is met when the rural property complies simultaneously with, according to the criteria and standards prescribed by law, the following requirements:
3. rational and adequate use;
4. adequate use of available natural resources and preservation of the environment;
5. compliance with the provisions that regulate labour relations;
6. exploitation that favours the well-being of the owners and labourers.

Article 187. The agricultural policy shall be planned and carried out as established by law, with the effective participation of the production sector, comprising producers and rural workers, as well as the marketing, storage and transportation sectors, with especial consideration for:

1. the credit and fiscal mechanisms;
2. prices compatible with production costs and the guarantee of marketing;
3. research and technology incentives;
4. technical assistance and rural extension;
5. agricultural insurance;
6. cooperative activity;
7. rural electricity and irrigation systems
8. housing for the rural workers.

Paragraph 1. Agricultural planning includes agroindustrial, stock raising, fishing and forestry activities.

Paragraph 2. Agricultural policy and agrarian reform actions shall be made compatible.

Article 188.

The destination given to public and unoccupied lands shall be made compatible with the agricultural policy and the national agrarian reform plan.

¹ The alienation or concession in any way of public lands of more than 2,500 hectares to an individual or legal entity, even if through an intermediary, shall depend on the prior approval of the National Congress.

Paragraph 2. Alienations or concessions of public lands for agrarian reform purposes are excluded from the provisions of the preceding paragraph.

Article 189. The beneficiaries of distribution of rural land through agrarian reform shall receive title-deeds or concession of use which may not be transacted for 10 years.

The title-deed and the concession of use shall be granted to the man or the woman, or to both, irrespective of their marital status, according to the terms and conditions set forth by law.

Article 190

The law shall regulate and limit the acquisition or lease of rural property by a foreign individual or legal entity, and shall establish the cases that shall depend on authorization by the National Congress.

Article 191

The individual who, not being the owner of rural or urban property, holds as his own, for five uninterrupted years, without opposition, an area of land in the rural zone, not exceeding fifty hectares, making it productive with his labour or that of his family, and having his dwelling thereon, shall acquire ownership of the land.

The public real estate shall not be acquired by prescription.

CHAPTER 4 : The National Financial System

Article 192. The national financial system, structured to promote the balanced development of the country and to serve the collective interests, in all of the component elements of the system, including credit cooperatives, shall be regulated by supplementary laws which shall also provide for the participation of foreign capital in the institutions that make up the said system.