Land allocation ranks as Colombia’s most pressing challenge in agricultural development, as well as playing a vital role in efforts to secure national unity. Since the early days of Spanish colonisation, the highly-concentrated agricultural lands have been a cause of political instability, with land distribution in Colombia among the most unequal in the world: more than half of all farmland is owned by just 1.15% of landowners, according to a study by the UN Development Programme. This has led to longstanding violence in the countryside and has kept large-scale investments at bay.

THE COST OF CONFLICT: After various failed attempts at agrarian reform in the first half of the last century, a number of armed groups emerged in the 1960s demanding land redistribution. While numerous peace attempts in the 1980s and 1990s led to the disarmament of a few, other factions have remained in conflict with the government until today, most notably the Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia, FARC). Adding to the security threats, paramilitary groups, some funded by large landholders, have taken up arms against the FARC and its associates. Over the past decades, the number of paramilitary groups have been reduced to a dominant few, most notably the United Self-Defence Forces of Colombia (Autodefensas Unidas de Colombia, AUC), while the government refers to the remaining factions as bandas criminales, criminal gangs, better known under their acronym BACRIM. Armed violence in rural areas has led to the abandonment and forced dispossession of more than 7m ha of farmland, as well as the displacement of some 4m people, owing to widespread contamination by unexploded ordnance and landmines. While no official figures exist, the Ministry of Agriculture and Rural Development (MARD) estimates that around 38% of these lands are now controlled by the FARC, with the remainder divided between various paramilitary factions. Despite the gradual stabilisation of most rural areas since the early 2000s, incidents of dispossession continue to be reported. In July 2012 the Prosecutor General’s Office charged 19 palm oil businesses of suspected links with armed groups and intentions to violently displace residents in the western department of Chocó.

LEGAL REMEDY: President Juan Manuel Santos has taken on the task of restoring lands to their rightful owners. The Victims and Land Restitution Law came into effect in January 2012 and aims to restore lands to displaced farmers or compensate those that are unable or unwilling to return to the countryside. The Land Restitution Unit was established to oversee the restitution process and set as its objective the settlement of 160,000 claims, covering 2m ha, by the end of 2014. While the law was received with wide acclaim domestically and abroad, its slow progress is indicative of the many legal and social limitations the process faces. According to MARD, 2161 applications out of a total of 6039 had been finalised at the start of 2013.

SHORTCOMINGS: One of the primary challenges is the opaque system of land administration. Many farming families have owned their lands for decades, but the majority never received official documents attesting their ownership. The matter is further complicated by a lack of trained public servants and judges to carry out the restitution process. A second issue is the reach of the law. Restitution is unlikely to result in sustainable livelihoods for victims unless it is accompanied by financial, technical and psychological support. The Institute for Rural Development, which is funded by the presidency, aims to provide such help. However, critics claim its resources are too limited and its policies too broad to account for the many factors required to encourage the revitalisation of livelihoods.

Another challenge is ongoing armed violence in some rural areas, notably in western areas of the country, undermining restitution efforts. “The ongoing violence against displaced communities will make effective implementation of this legislation a real challenge,” José Miguel Vivanco, the director of Human Rights Watch’s Americas division, recently told local media.

MAKING PEACE: The success of land restitution further hinges on ongoing peace negotiations with the FARC, for whom allocation of land is a pivotal dealmaker. Since November 2012 a six-point agenda has been under negotiation by representatives of FARC and the government in Havana, Cuba, including complex issues such as disarmament, illicit drugs, victims’ rights, as well as rural land reform. Given its fundamental role in the origins of the conflict, as well as its impact on present agricultural development, the latter has now been prioritised. On May 26, 2013 negotiators announced agreement on key principles of land reform, including redistributing lands from large landholders to peasants and expanding and accelerating development and productivity programmes. One of the measures announced, through which the government aims to execute land redistribution, is a land bank that will register unproductive rural areas in need of government assistance and illegally seized lands that will be incorporated in the ongoing land restitution programme.

While many details on the content and implementation of the agreement have yet to be announced, the move has led to some criticism from agricultural associations fearing an adverse impact on investments. As such, José Félix Lafaurie, president of the Federation of Cattle Ranchers, told local media that the rural model proposed by the FARC is “anti-business” and means “going back decades in rural development”. Meanwhile, political opponents have expressed concern that a potential deal could unlock new conflicts between agro-businesses and policymakers.

LAND ALLOCATION: The controversy over land issues has caused deadlock on a new agricultural bill that has been in Congress since November 2012 and slowed the formulation of regulations on domestic and foreign investments in agricultural lands. The longstanding debate on land allocation has divided Congress over the role foreign investors should play in agricultural development with some expressing fears of neo-colonisation. Such fears have led to the implementation of land caps, known as family agricultural units. While the size of these units varies by region, they are designed to prevent land consolidation by agro-industrialists in a bid to secure more equitable distribution. Part of the new bill seeks to overturn this regulation to allow for large-scale investments in areas with high agro-industrial potential. Despite considerable opposition thus far, the government has expressed its commitment to open-market policies. According to Juan Camilo Restrepo, former minister of agriculture and rural development, the proposed bill aims to regulate, not restrict, foreign investments in agricultural lands by protecting Colombia’s sovereignty and food security, all the while preventing land speculation. The government remains hopeful of convincing members of Congress of the nationwide benefits, as it realises that without it sector development will be hampered.

“The government does not believe it should close its doors to foreign investment in lands and agro-business,”

Restrepo told local media. While efforts on legislative change continue, the authorities are discussing alternative strategies to facilitate agro-investments, notably through the formation of smallholders’ associations and ensuing partnerships with agro-industrialists.

Meanwhile, foreign investors have taken a cautious stance towards the sector. According to the Colombian Agriculture Society, an industry lobby group, up to $6bn in foreign investment is currently on hold. Passage of the bill would do much to increase the sector’s 1% share in the nation’s foreign capital inflows.

ARABLE LAND: Foreign investment can play a key role in the ministry’s ambitions to increase usage of arable surface, which currently lies at 22%. In the National Development Plan 2010-14, the government has identified the Altillanura area in the Orinoquía region as a primary focus for agro-industrial investment, in particular forestry, palm oil and meat production. With plains spanning 3.5m ha, the area is strategically located near urban centres, as well as connections to the Meta and Orinoco rivers leading to the Atlantic coast. The government has drawn up a development plan quantifying investments in soil preparation and infrastructure.